The

Kingdom
Of Shylock
(Revised)

By

Frank Anstey M.P.

THE KINGDOM OF
SHYLOCK


By FRANK ANSTEY, M.P.

REVISED EDITION

MELBOURNE;

LABOR CALL PRINT, PATRICK STREET

1917.

CONTENTS
Page.

Love of Country .. .. .. 1

The Clutching Hand .. .. .. 5

Lords of Lootery .. .. .. .. 8

Mammon the Overlord .. .. .. 13

The Mighty Swindle .. .. .. 17

Gorging the Vultures .. .. .. 22

The New Bondage .. .. .. 26

The Dawning Slavery .. .. .. 31

The Profiteers Programme .. .. 35

Australian Money Trust .. .. .. 40

The Unseen Grip .. .. .. .. 44

State Aid to Robbery .. .. .. 48

A Nations Credit .. .. .. .. 52

The Capitalist Arsenal .. .. .. 57

National Currency .. .. .. 61

National Redemption .. .. .. 66

National Instrumentalities .. .. .. 70

Historic Note Currencies .. .. .. 75

War Values .. .. .. .. 79

Standard of Value .. .. .. 79

Money Trust Armies .. .. .. 80

Foreign Exchange .. .. .. 81

Foreign Exchange and Gold .. .. 87

Foreign Exchange and Local Currency .. 88

Foreign Loans .. .. .. .. 89

Shifting Foundations .. .. .. 90

CurrencyNotes and Cheques .. .. 90

American Banks .. .. .. .. 91

Australian Banks .. .. .. .. 92

Bank Capital .. .. .. .. 93

Bankers Agreement .. .. .. 94

War Profiteers .. .. .. .. 94

Things to Remember .. .. .. 95


Those Who Return

Found on the body of Sergeant Leslie Coulsonkilled on the
Somme (France), October, 8, 1916.

Who made the Law that Death should stalk the valleys?

Who spake the word to kill among the sheaves?

Who gave it forth that Death should lurk in the hedgerows?

Who flung the dead among the fallen leaves?

Who made the law?

Those who return shall till the ancient pastures,

Clean-hearted men shall guide the plough-horse reins,

Some shall grow apples and flowers in the village,

Some shall go courting in summer down the lanes

Those who return

Those who return shall find that peace endures,

Find old things old, and know the things they knew,
Walk in the garden, slumber by the fireside,

Share the peace of dawn, and dream amid the dew

Those who return

Who made the Law? At noon upon the hillside

His ears shall hear a moan, His cheek shall feel a breath,

And all along the valleys, past garden crofts and homesteads,

He who made the Law,

He who made the Law,

He who made the Law shall walk alone with Death

THE MONEY POWER

Plutocracy is more despotic then monarchy; more insolent than aristocracy; more selfish
than bureaucracy. It accumulates by conscious fraud more money than it can use, and
denounces as public enemies all who question its methods or throw a light upon its crimes.

(W. J. Bryan, New York Reception, 1906).

All undertakings in the field of industry are now dependent upon

the consent of the banker.

The Stock Exchange activities of the banks are becoming more

and more the controlling force in every department of economic
life.
Modern capitalism is the child of money-lending

Money-lending contains the root idea of capitalism

In money there is no thought of production

In money-lending economic activity has no meaning

Werner Sombart in The Jews and Modern Capitalism.

PRELIMINARY
The triumphant nation of tomorrow will be that which
defeats the others on the economic field, by reorganising the
conditions of human toil, and by bringing more justice and
happiness to mankind.

Zola in Truth Page 171.

In days of old the feudal baronage sallied forth with sword and
spear to levy toll upon terrorised producers. They were masters
of highways and waterways, and in the name of their
overlordship exacted tribute from the toiling people. They were
the self-evident personification of tyranny. To rise against them,
destroy them, escape their vassalage, was to leave an open road
along which the products of free men could pass untolled.
Organised resentment and bloody victory were the sole
essentials for the spontaneous development of industry in its
primitive forms.
But the days of primitive industry and primitive Radicalism are
passing. Under the freest political institutions exist financial
oligarchies more rapacious than the old-time baronies. They
bleed, not with sword nor spear, but by subtle processes that
leave a people impoverished, they know not how or why. The
mechanism of robbery is complex and impersonal. The operators
are out of sight. The public only know them as benignant gentry
distributing tracts or charity by the wayside.

In theory the Labor Movement is a protest against Capitalism. In

practice it is its endorser and subsidiser. Legislation is enacted to
make the baronage of Capitalism bearable and acceptable to
democracy, but the baronage remains. Its exactions, if less
outwardly brutal, are none the less extensive and complete. Not
in the least do we touch its sacred edifice, impinge upon its
prerogatives, or limit the unseen power which predatory wealth
exercises upon the political machinery of the State, the lives of
the people, and the economic future of the Nation.

We see States and Nation governed by the machinery of past

centuries. We have seen a Labor Government in N.S.W.
upholding the absurdity of an Upper Chamber to nullify its own
proceedings. We have seen Governments of working men
upholding as rigidly as the most rabid Tories all the procedures,
formalities, mummeries and ceremonies of obsolete forms of
government. In the midst of a flood tide of economic and
scientific pro
gression the legislative and administrative methods
of Governments stand petrified in the chamber of dead ages.

The organisation of Labor upon the basis of craft is not less

obsolete than all the other instrumentalities of past centuries.
The members have need to think in terms of a wider
brotherhood. True freedom consists in a state of mind as well as
exterior surroundings. The mind must expand as well as the
machinery of production. There is mental slavery as well as
physical, and slavery is not abolished because men vote for their
own enslavement, contented to be well fed. The Labor policy
must be radical in fact as in name. It must go to the root of things
or it goes nowhere.
This movement of ours talks of The Means of Production,
Distribution and Exchange. Of the first two we read much, hear
muchupon the last we are silent in speech and policy. Yet in
the modern world the last is fundamental in industry, in
statecraft, and in war.

It is in coping with the problems of Finance that the world has

got to find its regeneration. All reorganisations of industry, all
social projects, all efforts to climb out of the pit of misery into
which the war propels the toilers are dependent upon the first.
No skin-plaster legislation, no mere policy of alleviation, will
meet the position. Revolution in action and method is the one
saving instrumentality, the sole alternative to a long grind ing
period of absolute slavery.

I make no apology for this statement. I do not stand alone, nor in

poor company. I remind the men and women of Australia of the
speech made last May (1917) by Lloyd George to a Labor
delegation. He said:

The whole of society is in a molten state. You can stamp upon it almost
anything you like, provided you act firmly and determinedly. There is no time
to lose. Unless the opportunity be seized it may pass. The post-war settlement
will succeed in proportion to its audacity. Have audacity by new ways and
methods, and you will get a really new world. If not, then God help the
country.

This impulse, this essential action, cannot come from one man or
a few Revolutions come from the miseries, the dissatisfactions,
the passions of the masses. The duty of leaders is to be ready for
it, and when it comes, guide it along the right channels.

It is in this spirit that I offer to the men who take an interest in

the affairs of their country some facts for their consideration. It
will be noticed that I do not offer them the exploded theories of
the text books. I present the spectacle of the machine in
operation in Europe, in America, in England, in Australia. I give
them the sources of my information into which they can dive
further if they wish. I present them with no academic
dissertation, but with the admissions and affirmations of men
who live on the game. The business is buttressed with a dead
language. I endeavor to present it in a language all can
understand.

Here is a summary of financial facts, of much reading through

dreary records and evidences of many Commissions. Here is a
record of financial buccaneering, financial legislation and capi-
talist methods of waging war at a profit. Here is a description of
the only solid foundation upon which all policies of effective
reformation and national progress must rest.

This booklet by its reference to documents and historic facts, has

something more than passing value. It is a booklet, to which the
holder in years to come, even if he does not agree with its
conclusions, can turn to and ask, Where is it? To that extent, if
for nothing else, it possesses some value to all students of
economics, to all would-be leaders of men, and all those lovers of
their country anxious to understand its problems and help in
quiet ways.

It is not a question of a class or of class interests. The class

struggle will disappear with the exterminated interests of the
predatory cliques. It is a question of the capacity of the State to
meet the rising tide of its responsibilities. It is a question of the
economic reorganisation on lines that will furnish its people with
an attractive existence and attract others from abroad. It is a
question of how and by what means its territory shall be utilised,
its resources developed, its wealth multiplied, so that by its
wealth and its peoplethe abundance of the one and
widespread owner ship by the other, the essentials of a self-
sustained community will be secured.

Slavish acceptance of transmitted ideas, stolid attachments to old

methods and old fetishes accomplish nothing. That was society
stagnates, ossifies, and becomes the prey of the first besieger.
Note the helplessness of Governments, their aimless drift on the
stream of events, their lack of national objective, their poverty of
policy. These things provoke disaster, and Australia is moving to
the crisis.

FRANK ANSTEY. [Acknowledgments to Claude Marquet and

other ArtistsF.A.]

ERRATA: Read supporters inside for supporters outside on

line 21, page 36. Read watered for valued on line 16, page 76,
to for by on line 16, page 89.

Love of Country
Romford, Essex,

May 30, 1915.

I look over this beautiful, delightful country, and I wonder if it is really true that there is so
much bloodshed and horror in the world. Yet, last night by my window went the wounded
westward, and this day, as for months past, go brave men eastward to the slaughter, and the
Jews are making much money.

Mother in England to her son in Australia.

Where is the Englishman who does not love the land of his
nativity. Where is the one, who, in the hour of struggle, does not
forget all that is bestial in her cities, and remember only, all that
is beautiful in the things left undefiled.

Hills and dales, rolling downs and valleys, woodlands and

meadowland brooks and streams that yet flow untainted to the
sea, daisies and primroses wild growing in the unfilled pastures,
blackbirds and thrushes, finches and linnets warbling in the
hedges, the lark up yonder in the skythese pictures pass before
the Men of England, heirs of glory, wherever in the wide world
they be, even as visions unfold in the passing hours of slumber. I
love a country, and love it very dearly, is not to be stone deaf to
the **** trump of existing facts.

Through all the centuries long lines of unnumbered and now

forgotten dead have marched forth from every village, along
every road and byway, do battle for this little sea-girt isle.
And amongst those men were kings. Kings in reality, not
figurehead kings, who were Englishnot Germans. Kings who
beckoned comenot pointed go. Kings who said, the place
in front is minenot the view from here (a hundred miles
behind) is fine. Kings whose sceptre was the battleaxe, not the
golf-stick. Kings whose slogan of Follow the King meant follow
him to the battlefieldnot to the water-bottle.

PATRIOTISM.

Beside the King rode the fighting barony of England, and behind
them ye yeomanry from Kent and Devon and the hills of far
Northumbria. There were men, as always, too old or fat to fight,
and men, even then, whose thoughts on money bent gave them
no stomach for ye battle. But none escaped the sacrifice. None
were permitted to dodge their share of the common burden.
Those who did not contribute their bodies contributed their
money. One or the other they had to give. Wealth as well as
human beings were offerings upon the altar of country. No
Shylock could make a profit from warhe got no interest. No
trader could engross or corner the necessities of lifehe got
the hangmans knot. He was regarded as a traitor, and got a
traitors doom. And this was the law of the land for long
centuries.

IN DAYS OF OLD.

Thus it was that England for over a thousand years waged war at
home and abroadwars of aggression and defencewars by sea
and landwars on Spanish main and coasts of Tartarywars
against Armadas of old Madrid and fleets of the bold Van Tromp
wars in Normandy and Flanderswars of Roses and of
Roundheadswars inside and outside, civil and foreign, some -
where, alwaysand yet she emerged from that thousand years
of bloody strife free of debt, no harpies within her borders to
gather interest from the blood of battle. Give your life or give
your money. That was patriotism in the days when patriotism
meant love of country, and not a blood-sucking, money-
lenders parody.

THE BLACK FLAG.

But times have changed. Dutch finance, a Germanised throne

and capitalised industry are the marks of the transformation.
Kings no longer go forth to battle, and Money no longer freely
serves the Nation that protects it. Men may die, but Money makes
no sacrifice. It looks upon bloody war as a rich gold mine
yielding fat dividends for ever and ever without end. Human
bloodsuckers, who risk neither life nor limb nor penny, wax fat
on Armageddon. They constitute the Money Power that
bestrides all coun tries, and makes all nations its slaves. It
exercises political power under every form of government. It
makes the world one wide dominion over which its black flag
flies unchallenged.

The Money Power is something more than Capitalism. It is its

product; and yet its master. Capitalism, in its control of the
great agencies of production, is observable and understandable.
The other lurks in vaults and banking chambers, masquerading
its operations in language that mysti fies or dazzles. Industrial
Capitalism may roll itself up into great monopolies in production
and distribution. It cannot exist for an hour apart from the
powers that hold the Monopoly of the Instruments of
Exchange.

Modern Capitalism throws ever-increasing power into the

hands of men who operate the monetary machine.

These men constitute The Financial Oligarchy. The key to

power is combination and concentration. They control banks,
trust companies and insurance. They control the savings of the
people. They say to whom the savings shall be lent and from
whom withheld. They finance industries in which they are
interested, and withdraw facilities from would-be rivals.

Such is the Modern Money Power.

Profits are piled up in bank credits, reinvested, and reinvested

until the field of industrial activity is exploited to its limit.
Money, in the language of the market, becomes plentiful and
cheap. In other words, the industrial outlets are diminishing,
and the rate of interest, the reward of capital, is falling.
Something must be doneit is done. International hatreds are
stimulated. People prepare for peace by grinding the axe of
bloody slaughter. Armaments are demanded, loans are raised
and the right to levy perpetual tribute on the nation is given in
return. Even this is insufficient to mop up profits as rapid as
their accumulation.

THE PROFITEERS.

So war comes. Any pretext suffices. War must come. It is the pro
-
duct of the predacious instinct in every age and clime. But there
is a differ
ence. Under every other economic system, war placed
the yoke of slavery on the conquered foreigner. Under
capitalism, war is made the instrument of the enslavement of
men of kindred race and blood.

It was Count Von Moltke, himself a warrior, who, in the preface

to his book on the Franco-Prussian war, said :

The great conflicts of modern times break out contrary to

the will and wish of nominal rulers. The Stock Exchange has
acquired an influence so great that it is able to call armed
nations into the field to fight in its interests. Blood flows in
order that the demands of High Finance may be liquidated.

It was another writer of no mean repute who said :

The magnitude and appalling character of the influence on

the welfare of the whole nation, exercised by the Stock
Exchange, is entirely due to the fact that the securities dealt
in on its floors represent in paper form the bulk of the
business of the nation.Frank Hirst in The Political Economy
of War.

So war comes. War borrows millions of the piled profits

interest rises. More millions of loanshigher and yet higher
interest. Much rubbing of hands on the Stock Exchanges3 per
cent, yesterday, 4 to-day, and 5 or 7 tomorrow. Men may rot
on battlefields, but money gathers an ever-increasing harvest of
rich ripe fruit.

Levy men? YES.

Levy money? NO! NO! NO! Gott in Himmel. That ish

confishcation. We will lend it to you at much interest.

So the nation can levy menbut not Money.

Men may die.

Money lives.

Men come back armless, legless, maimed and shattered.

Money comes back fatter than it went, loaded with coupons,

buttered with a perpetual lien on the toil of the fathers and
mothers and sisters and brothers of the men who died, that the
nation might live.

Where is the love of country to those vampires who batten and

grow rich on the rotting carcases of the worlds humanity?

<

The Clutching Hand

The capitalisation of private industry is followed by the capitalisation of the Nation. To be

in pawn, to be mortgaged and bled, to be divided into stocks arm bonds and debentures, and
sold in pieces is the fate of Nations.

John A. Hobson, Evolution of Capitalism.

OLD JEWRY.
There was a time in the history of the British race when the
jobber pursued his gambling in Change Alley or the Jews Walk,
in the surreptitious manner of the accursed. He had one eye on
the speculative customer and the other on the passing police. The
Jew Medina came in the train of William the Dutchman. He gave
Marlborough 6,000 a year for the first tips of victories in France
or Flanders. All the tricks bound up in rising and falling prices,
lying reports from the seat of war, the pretended arrival of
couriers, the formation of financial cliques to work the market,
cabals and connivings behind the scenes, the whole system of
Mammons WheelsMedina, the father, knew them well, and
worked them to the full. His successors have amplified his
methods.

After Medina came the Jew, Manessah Lopez. He amassed a

fortune in the panic which followed the false news that Queen
Anne was dead. He bought on the slump and sold on the rise.
Then came Samson Gideon and the GoldsmidsAbraham and
Benjamin. These were succeeded by the Rothschilds.

THE REIGN OF THE ROTHSCHILDS.

The Napoleonic wars made the fortunes of the Rothschilds. From

1797 to 1821 the British nation was on a paper currency. It was
for the most part the paper currency of the private banks. They
increased their note cir
culation from seven to 50 millionsthat
of the Government increased from nine to 27. The first
depreciatedthe last stood steadfast. With their Private notes
they bought interest-bearing bonds. The notes flowed through
channels commerce back to the banks, ready for the next loan.
Loans were floated as low as 40 in the 100the average 60.
The nation was loaded with a bonded debt of 870 millionsdead
men on the battlefieldsprofits for the cormorants.

The Rothschilds combined banking and brokerage. Behind the

operator on the market stood the backer, the banker. He brought
to the bulling and bearing and thimble rigging all the resources
of deposits entrusted to his care. These were manipulated for
fortune making. Loan floating, as distinct from lending,
became a new occupation. Come into the good thing. Sub scribe
to the loan. The loan is floated. Fortunes are skimmed off in
brokerage and commissions. The money market is tightened,
scares worked, prices depressed, the public sell, the riggers buy,
confidence is restored, prices rise, the public buy once more,
perpetual game of depression and inflation, colossal fortunes
made not by honest trade but by public decep tion, financial
tricks and market fakes.

Here are all the instruments of the spieler and tick-tacks of

the race-course, garbed in respectability, and sheltered and
hossanahed by the Law and the Church.

PATRIOTS TO EVERY FLAG.

The Empire of High Finance has become intricate and extensive.

Around the throne have gathered satraps and satellites, catching
the sun shine. The dynasty of the Rothschilds is more powerful
than evercom patriots and puppets do its will and share the
spoils. Its dominion is over nations. Its influence and its interests
are as much in Berlin and Vienna as in London. Its titles and
distinctions are gathered from every flag. Alfred Rothschild, ex-
director of the Bank of England, partner in the firm of N. M.
Rothschild and Sons, holds the Grand Cross of Austria, the first-
class Order of the Crown of Germany, was, until the outbreak of
war, Austrian Consul-General in London. Then he became an
ardent Britishera welcome guest in every profit-mongering
household, waxing fat on the blood of the dead soldiery of
Britain.

His son, Albert Rothschild, born in Germany, educated in

Germany, a member of the Imperial Yacht Club of Germany, an
attache to the German Embassy in London, became an ardent
Britisher as soon as war broke out. His patriotism went with his
interests. The Majesties of the Kingdom of Finance are exempt
from anti-German hostility. The nation may diethe perquisites
of the parasites will be preserved. Any nation suits, so profits are
undisturbed.

CAPITAL-ISM.

When a business is floated into a company of so many shares

of 1 or 10, that business is capitalised.

Rich quick comes not from the processes of legitimate industry,

but the market manipulation of negotiable shares. The actual
business is a thing to monkey with; to boom or stiffen, to the
spielers needs. Shares are let out and pulled in.

Every time they come in, they come loaded with the loot of a
deluded public. Between the boom and the burst, the inflation or
depression, the price at which the victims buy and the price at
which they are squeezed out dry the riggers of the market draw
to themselves the savings of the trustful.

THE MONEY POWER.

This group of speculators (financiers) properly designated and

distinguished as the Money Power, controls the whole
mechanism of exchange, and all undertakings in the field of
industry are subject to its will and machinations. It wields an
unseen sceptre over thrones and populations, and bloody
slaughter is as profitable to its pockets as the most peaceful
peculation.

No nation can be really free where this financial oligarchy is

permitted to hold dominion, and no democracy can be
aught but a name that does not shake it from its throne.

 Lords of Lootery

This reckless and remorseless brutality comes from men who speak our language; who
were born under the same skies and nurtured in the principles of a common faith. It comes
from the cold, phleg
matic heart of avariceavarice that seeks to paralyse labor and increase
the burden of the nations debtavarice that refuses to be satisfied without the suffocation
and strangulation of all the labor in the land.

Senator James Mills, in the U. S. Senate.

If you get a grip of the pre-war scheme of the American

Money Thugs, you will comprehend the operations of
Mammons wheels in every land.

MONETISED SECURITIES.

In the American Republic the banks can deposit bonds in the

National Treasury and draw currency notes on the basis of
bonds deposited.

W. J. Bryan, in the U.S. House of Representatives, June 5, 1894, de

-
scribed the system thus:


A bank invests 100,000 dol. in 2 per cent, bonds. It deposits the bonds in the
Treasury and receives 90,000 dols. in bank notes. This is a return of so much
of the capital expended for the purchase of bonds, so that the bank is only out
10,000 dol. On that sum the bank receives 2,000 dols. interest, less 1 per cent.
tax on circulation. If a private citizen buys bond he can only draw interest. If a
bank holds the bonds it can not only draw interest upon it, but draw 90 per
cent, of its value in national notes.

In 1900 the Yankee banking corporations lobbied through

Congress an amendment of the National Note Act. They secured
the abolition of the 1 per cent. tax, and got an increase of notes
from 90 to 100 per cent, of deposited bonds.

In 1902 the banking corporations secured a further amendment

of the National Note Act.

By this amendment the banks could secure national guaranteed

notes not only on a deposit of Federal bonds, but upon deposits
of municipal bonds of railway stocks, bonds of Steel, Beef,
Standard Oil, and other securities of specified corporations.

THE MONEY TRUST.

Between 1902 and 1907 the banking corporations deposited such

securi
ties and drew notes to the extent of 250,000,000 dols.

Armed with these and other resources, the men controlling the
great trusts and the principal banks of America organised a
scheme of complete dominance over the industrial and financial
life of the American Nation. They waged a war of extermination
against every competitor.

Against this policy President Roosevelt set his face. He

prosecuted and secured against Standard Oil verdicts that loaded
the Trust with penalties to the extent of 29,000,000 dol.

At once the Standard Oil banks (under Rockefeller), the Steel

Trust banks (under Morgan) and the Beef Trust banks (under
Armour) entered into an offensive alliance. This Triple Alliance
dominated the financial world of America. It had a majority on
the Clearing House Association of all the big cities.

The New York Clearing House Association commenced

proceedings. It commanded every independent bank to come to
heel and take orders. Those who refused were expelled from the
Clearing House (October 20, 1907), on the ground that such banks
were no longer worthy of public confidence Such action
destroyed confidence in the blackballed banks, and caused a run.
Charles Barney, of the Knickerbocker Bank, and Howard
Maxwell, of the Brooklyn, committed suicide; all others
capitulated.

THE SYSTEM.

Within three days (from October 20 to 23, 1907), every bank in

the United States had been brought to heel, taught obedience and
mobilised for action. The representatives of banks expelled on
the 20th, having duly made submis sion, were re-admitted to
membership. Every bank received its orders, its ammunition and
the hour of action.

Next day (Oct. 24, 1907), the strike of the Bank Trust against
the nation commenced. Every bank, from the Atlantic to the
Pacific, refused to pay out gold; refused to pay anything but a
paper currency of its own creationa currency with which
every bank throughout the United States had been previously
stockedthe incontestible proof of preparedness.

The paper notes of the American Money Trust were designated

Clear
ing House Certificates. They were of all denominations
down to two dollars. Every bank at the preconcerted signal paid
out in this currency. With it wages were paid and business
conducted throughout the United States.

THE ULTIMATUM.

On October 25 (1907) Pierpont Morgan declared on behalf of the

Banking Association of America that:

We will continue to trade in a paper currency, and pay no more gold, until
we get from President Roosevelt the necessary guarantee against adverse
legislation. The people can take paper money or leave itthey will get nothing
else. The mills, mines and other industries controlled by ourselves or allied
interests will slacken down or close until we get effective guarantees against
anti-trust prosecutions.

This was the ultimatum of the Money Trust to the subject nation.

STAND AND DELIVER.

The banks held the country by the throat. If any depositor moved
process, the great magnates could carry him from court to court
for years. If the Government enforced the law of cash
redemption, the Banking Trust threatened to close its doors. Only
a revolutionary, seizure, that Congress was not prepared to
enforce, or the press to endorse, could defeat the conspiracy of
the Financial Thuggery.

PAPER CURRENCY.
Throughout the United States the newspapers of the Trusts and
bank officials set out to prove that paper money issued by
private bankers was as good as gold, or better. The President of
the Bank of California said:

These Clearing House Notes are based on a deposit of the highest class A
security. Currency that represents good security is good currency. The
laboring man is working for a living. These notes are avail able for him, if
married, in the payment of household bills, rent, etc.; and, if single, for such
enjoyments as he may seek. He gets value for his laborwhat more can he
ask? He can get no more with gold money than he can with this paper.

The banks refused to pay gold, but they enforced payment in

gold. To refuse to find it was to have bank facilities withheld and
be ruined. By this process every ounce of gold was bound to find
its way to the bank vaults and stop there. Mercantile houses and
producers were unable to meet their obligations. Immense
quantities of goods were hurriedly shipped to Europe in order to
secure gold.

When the banks went on strike it was not a period of falling

trade or industrial depression.

The Economist, of December 21, 1907, said: There never had

been such prosperity in the history of America.

The Contemporary Review (January, 1908), said: It was a time

of exceptional prosperity.

Never were the gold reserves of the banks so large as when they
refused to pay out.

The Economist said: There was a criminal hoarding by the

banks.

Lord Welby, of the British Treasury Contemporary, January,

said: The stock of gold in the United States is enormous.
In this last fact is the answer to those who assert that a paper
currency will drive gold out of a country. The Economist
(November 9, 1907) pointed out that, while the private banks in
the United States inflated their note issues in ten years by
67,000,000, the stock of gold increased 175,000,000. The
international balances had been favorable to the United States,
and gold flowed in to settle those balances, irrespective of
the internal currency.

The inflowing gold was cornered by the Money Trust, and its
emission to the general community was barred.

The inability of the mercantile community to meet the gold

claims of the Bank Trust, or to secure credit, brought about
widespread collapse. More and more mines, mills and factories
fell into the hands of the Trust at depreciated values. Hordes of
men were out of work. The United States Attorney-General
denounced the conspirators as

Pirates, whose operations are worse than those of the

notorious Tweed gang-

In these circumstances there went up from all sides, even from

the Anti-Trust journals, demands and appeals, urging President
Roosevelt to come to terms.

CONQUEROR MORGAN.

The London Standard (December 7, 1907), reported what

followed. It said:

Mr. Pierpont Morgan is in virtual control. He has made it too strenuous even
for Mr. Roosevelt. Mr. Roosevelt sent an invitation to Mr. Morgan to come to
White House and discuss the situation. Mr. Morgan consented to go only when
Mr. Roosevelt sent him a personal letter promising a different attitude
towards financial interests in the future.

The President capitulated, forwarded his apology, and made the

desired promises.

Morgan met Roosevelt on November 16, 1907.

The agreement was:

1st. That Roosevelt drop his Anti-Trust campaign.

2nd. That no effort be made to collect the Standard Oil lines.

3rd. That no further action be taken against Trusts or Combines

con
trolled by Morgan, Rockefeller and Armour.

4th. That portion of the Sherman Anti-Trust Act be suspended.

5th. That gold previously paid into the Federal Treasury for
bonds be left on deposit in the private banks.

THE TRUST MAGS.

The terms were accepted. The New York Herald, in its issue of
November 25, 1907, said:

Roosevelt has received his lesson. We shall hear no more of

his at
tacks on the Trusts.

The London Daily News (December 6) said:

The Trust magnates hardly seem to have moved a finger, yet

they have made their power felt throughout the civilised
world. They have made no sacrifice, but, on the contrary, will
emerge wealthier men than before. They have brought the
most powerful Government in the world to its knees; they
have forced it to suspend certain laws, and made it promise
to interfere with them no more.

In the Morgan-Roosevelt compact, Morgan agreed, on behalf of

the banks to withdraw Clearing House Notes and resume full
and free payment of cash.

[sentence missing]

the banks there (United States) have reverted to cash payments.

It ex
pressed the hope that American financiers were about to
abandon their marauding tactics.

On February 3, 1908, the cables announced that Roosevelt had

issued against the Banking Trust the most impassioned and
stirring document ever issued from the White House. The
Morganites had refused to keep their part of the agreement.

THE REAL RULERS.

To this Morgan replied, denying any such promise. He said:

The banks will take their own time to resume specie

payments, and will continue to use their own notes so long as
it suits their convenience.

His only promise, said Morgan, was that the banks would not tie
up commercial houses with a demand for gold.

In its issue of February 13, 1908, the Melbourne Argus

announced that the American banks were still issuing their own
paper currency in de
fiance of the law.

That same month Senator Aldrich, of Rhode Island, introduced

and carried through a Bill to legalise the hitherto illegal
operations of the banks.
In addition (May, 1908), under the Emergency Currency Act, the
Government was authorised to issue to the banks Government-
guaranteed notes to the extent of 500,000,000 dols., upon a
deposit of public or private bonds, trade bills or other
securities.

So a capitalist Government, acting on the advice of bankers,

can, and does, issue currency based, not upon gold, but upon
bonds, bills and other securities.

A Labor Government worthy of the name could do ditto for the

Nation.

Mammon the Overlord

The Money Power preys upon the Nation in times of peace, and conspires against it in the
hour of its calamity. Conscienceless and compassionless, it enervates its votaries, while it
impoverishes its victims. It can only be overthrown by the awakened conscience of the
Nation.

W. J. Bryan, Madison Square Gardens, New York City, August 20, 1906.


THE REAL RULER.

The Yankee financiers, under Pierpont Morgan, have brought to

their fullest bloom the germinations of Medina and the
Rothschilds. A long chain of banks and insurances, the savings
and premiums of the people, are their instruments.

THE MONEY MISH.

During the six years, 1910 to 1916 the Yankee banking

corporations, under the triple mastery of Morgan, Armour and
Rockefeller, organised and perfected an additional scheme of
robbery and domination. It replaced the old Clearing House
Certificate swindle, and rested securely on the legal sanc
tion of
the speaking-tubes of the Trust in politics.

The preliminary to the new move was the organisation of the

Monetary Commission, under the chairmanship of Senator
Nelson Aldrich.

While this commission was sitting, Woodrow Wilson, then (1911)

pro
spective candidate for the Presidency, chanced to say in New
York:

The greatest monopoly is the Money Monopoly. The

financiers are more powerful than the nominal rulers.

Next day the New York Times asked Wilson what he meant by
Money Monopoly. The following morning (June 17, 1911), the
New York World came out and said:

The day the Times asked Governor Wilson what he meant by the money
monopoly, the newspapers announced that Mr. Morgans Bankers Trust
Company had bought from the Equitable Life Assurance society its holdings in
the Mercantile Trust Company, and that by this transfer the aggregate assets
of the banks dominated by J. P. Morgan and Co. exceeded 1,000,000,000
dollars. This 1,000,000,000 dollars is not Mr Morgans money, but it is in the
hands of the Morgan interests, which can say who can borrow it and who
cannot borrow it.

When Mr Morgan took over the Equitable from Thos. F. Ryan, he paid more
than 2,500,000 dollars for stock that can only earn 3514 dollars a year; but
what he really bought was control over the Equitables 400,000,000 dollars
of assets and 80,000,000 dollars of surplus.

This control of banks and insurances by a few men

constitutes the Money Trust. It is here in Australia as in
America.

Morgan testified before the Pujo Committee that there was no

such thing as a Money Trust; that he did not control anything;
that he had no wish to control anything. Yet the committee
reported that, by his control of banks, insurance and other
companies, he controlled not less that 25,000 million dollars,
could say where it should flow and from where it should be
diverted.

PREPAREDNESS.

The Nelson Aldrich Monetary Commission presented its report. It

was based upon an investigation of the banking and currency
systems of all countries.

It epitomised the most recent innovations in banking, and the

most advanced policy in currency.

It directed attention to the statement of the Japanese Minister of

Finance, that in point of the perfectness of organisation the
National Bank of Belgium stands highest. It directed attention to
the special discount system; to the fact that notes were issued,
not upon gold, but upon all classes of securities, and to the
statement of the governor of the National Bank of Belgium, that
the necessary limits of currency are the requirements for
transactions and the movement of business.

Upon the information contained in these reports, with additions

born of their own experience and interests, the Money Kings
proceeded to reorganise (in their own interests) the currency
and banking system of the United States.

Maurice Patron, in his report to the Commission on the Bank of

France, had said:

It is difficult to understand how, in certain countries, an

undertaking of such universal interest should be left to
private enterprise.

But the Money Kings were determined that (he system should be
in their hands, extending their security, power and profit.
Increased facilities to trading public were merely incidental.

THE START.

Everything being ready, the new system was given a legal

existence by the Federal Reserve Act of 1913.

The Act creates an overlordship of five Financial Magnates, with

the Secretary of the Treasury and the Comptroller of the
Currency as ex officio members.

The banks of the U.S. are grouped into 12 divisions.

In each division there is one great Central Bank. All gold

reserves must be kept in the Central.

In each Central there is a Federal Agent.

Each Central through the Federal Agent or supervisor, is an
issuer of paper currency to the member banks. This currency is
guaranteed by the Nation.

The private banks are relieved of all responsibility to redeem

their obligations in gold.

Currency is not issued against gold. It is issued upon securities of

every description bonds and deeds, drafts and bills arising out
of commercial transactionssecurities previously deposited
with the banks by the public as securities for loans.

The United States Treasury Report, of July, 1915, says (page 58):
Elasticity in note issues is provided by a new form of currency
based primarily upon the re-discount of commercial paper.

This is the Re Discount System, the system that necessitates a

Central bank to work it; the system that in varied forms exists
through out Europe; the system that the Monetary Commission
was instituted to popularise and localise in America.

Paul Warburg told the Commission that:

The European financial system is constructed upon discounts as

its foundation; the American system is constructed upon bonds
and stocks as its foundation.

The American money kings seized the European system,

engrafted it on their own, got a combination of both, and the
advantage of both. The great Central is the reservoir which
other banks can tap for currency on securities deposited by the
public.

The immense gold stocks now held (1917) in America, have no

more connection with the paper currency than wheat or cotton
stocks. Gold is the bankers dice in the international gamblenot
an internal currency.

R. H. Howe, in his book on banking (1916), states:

The coins in America have almost entirely disappeared from
circulation, with the exception of the silver coins used in retail
trade.

The Yankee Money Trusts Magnates have developed a paper

currency by capitalists for capitalists, buttressed by the Capitalist
State.

When war broke out in Europe, the American Government

brought into operation the Emergency Currency Act of 1908, and
on August 4, 1914, Congress passed through both Houses an
amendment raising the authorised Government Note Issue from
500 to 1,000 million dollars.

This was in addition to, and apart from the note issues of the
Centrals, just as the British Governments note issue of August,
1914, of 100,000,000 was apart from and in addition to the
issues of the Bank of England.

In both countries they were issues to banks only.

In both countries the banks could take all the bonds, deeds, liens,
receipts, bills, and other securities lodged by the public as cover
for loans, and upon those pledges get legal tender currency, with
which to trade and make further loans.

But in neither country were these facilities available to the

average citizenthey were for bankers and brokers only.

In the United States these National legal tender notes were issued
to the banks on the basis of 90 per cent, on bonds 75 per cent on
commercial bills, and 66 per cent on deeds.

Thus in the United States there is the cheque currency of the

individual bank, redeemable in the Reserve Note of the
Central, redeemable in its turn on the legal tender note of the
Government!
Thus a Government that functions in the interests of the
great banking corporations, is an instrument of great
monetary value to the capitalists who own and control that
Government.

That which capitalists can do in the interests of capitalists,

the democratic State can do in the interests of the Nation.

The Mighty Swindle

With the first breath of national danger the fabric of financial fakery tottered to its base. It
would have tottered to ruin unimaginable had not the Chancellor of the Exchequer backed
the banks with the credit of the Nation.
Oswald Stoll in The Peoples Credit.

The Great War will be long remembered for other things besides the destruction of life and
the reconstruction of the map of Europe. On the financial side the most notable event is the
universal abandonment of the gold standard, not openly admitted, but de scribed in the kind
of language familiar from the bulletins of defeated armies.

Quarterly Review, April, 1915.

When you have read this you will know how the Financial
Patriots of England worked the War for Profit.

The moment war broke loose in Europe the much-extolled

British System of Finance fell to pieces. The bottom fell out of
the Money Market. The Stock Exchanges closed. The banks
were unable to meet their obligations.

The Daily Chronicle, of August 5, 1914, said: Credit based

on gold has come to an end. The Statist admitted a
Complete breakdown of the banking system.

The British Government came to the rescue.

It called together the heads of the great banks and

representatives of the Stock Exchange.

It asked them to devise a scheme, whereby they might be saved

at the expense of the people.

This Finance Committee consisted of Lord St. Aldwyne, Lord

Revelstoke, Sir John Bradbury, Sir Walter Cunliffe, Austen
Chamberlain, each one a chief of a bank tottering to ruin.

This committee instituted a process of salvation based upon the

guarantee of the British Nation.
The credit of the State, ever powerful where gold is a failure,
saved the situation.

The guarantee of the British Government gave a security which

privately controlled gold was incapable of giving.

STATE AID TO CAPITALISM.

The first step of the Government was to issue to the private

banks millions of 1 and 10/- notes, to enable the private banks to
meet obligations to depositors.

The banks were closed four days to give the Government time to
print and issue the notes essential to the salvation of the banks.

When the banks reopened they paid their obligations in

notes manu
factured and guaranteed by the British Nation.

The total authorised issue was 100,000,000afterwards

increased. These notes had written across their face, legal
tender for any amount. These notes were not Bank of
England notes. They were issued from the Treasury. They did
not carry any promise of redemption in gold.

Lloyd George, speaking in the Queens Hall, London, said:

Have you any of those little 1 notes?

They are only scraps of paper.

What are they made of?

Rags!

What are they worth?

The whole credit of the British Empire.

With these notes the banks met their obligations.

These notes took the place of gold, and by the end of December
the notes in the hands of the public amounted to 103, 000,000.
(Times History of the War, page 264, vol. 7.)

The Government further arranged that private banks might re-

discount at the Bank of England all internal bills and securities
upon which they (the private banks) had advanced, and that all
settlement, whether between the Bank of England and the
private banks, or the private banks and their debtors, should be
postponed until twelve months after the war.

The Investors Review (August 22, 1914) reported that the

country was operating on pure credit money with the
mechanism of exchange excellent condition.

In other words, the country was working on a paper currency,

guaranteed by all the resources of the British Nation.

It was a proof of the correctness of the statement made by Stoll

in his book, The Peoples Credit, that:

Banking credit is really national credit, because in every crisis it

is the Government that is compelled to step in and provide
notes and discount facilities to save the banks.

THE GREAT CONSPIRACY

[sentence missing]

and acquiescence of the British Government they organized and

perpetuated on the British race the most gigantic swindle of
modern times.
The Clarion of August 7, had given warning, it said:

The democracy is uniformed, and without guidance, at a

time when the greatest and most bare-faced piece of thimble-
rigging is about to be perpetrated.

The institutions controlled by the Money Kings held hundreds of

millions of bills for goods for goods delivered to Continental
houses, including Germany. These bills, as far as Germany was
concerned, could not be met because of the war, and could not
be met in the case of other Continental houses because the war
had disastrously affected them.

On August 13, 1914, the British Government guaranteed all

bankers, discount brokers and other holders of worthless
commercial paper against loss.

It did more. It monetized those bills. It issued to the banks

certificates to the extent of those bills. The certificates authorized
the directors of the Bank of England to discount the useless bills
and issue notes thereon.

The Bank of England, guaranteed and secured against loss by the

Government, did not, so says the Investors Review, even
draw the line against the acceptance of German firms. The
Germans might never be able to pay, but, so says the same
authority, the Government acted to secure the British holder
against loss.

The Bank of England directors consisted of the Governor, Sir

Walter Cuncliffe, and 24 financiers, who were directors of
assisted institutions.

THE ROBBERS INDEMNITY

By the 2nd September, 1914, the Bank of England had discounted
waterlogged bills to the extent of 95,000,000.

The London Economist (August 29), defending the banks

against a charge of harsh treatment of the public, used these
words:

IT IS TRUE THE GOVERNMENT HAS GUARANTEED THE

BANKS AGAINST LOSS ON BILLS, WHICH LOSS MAY WORK
OUT AT ANYTHING FROM 50,000,000 TO 150,000,000,
WHICH WILL, OF COURSE, BE ADDED TO THE NATIONAL
DEBT.

Of course added to the National Debt of course.

The Economist, in its issue of September 12, after saying that

under the 13th August arrangements all bank losses will be
added to the National Debt, said :

The loss must be enormous because the Bill of Exchange Act declares that
when a bill is payable after sight is negotiated, the holder must present it
within a reasonable time, otherwise the drawer and endorser are discharged
from obligations. The banks are the holders. The war renders it impossible for
them to present in reasonable time.

Thus, had not the Government come in to load the loss upon the
British Nation, the Money Kings would have had to carry their
own baby.

No Government on earthnot even a Labor Government

will guarantee the worker against loss from unemployment.
Not even when that unemployment is the result of war, or
drought, or pestilence. But every Government no matter
what its name (that functions in the interests of Capitalism)
will take active steps to save the Money Bags from loss, and
this felonious practice it will justify in the name of public
interest and popular well being.

But from where, it may be asked, did the British Government get
the hundred odd millions to compensate the Lords of the Money
Market for the losses on useless trade bills?

It could not get it from men and institutions whose credit the war
had destroyed. The only credit and the only currency in Great
Britain was that created, secured, and guaranteed by the nation.

SOMETHING FOR NOTHING.

The Government issued to the private banks and discount houses

of England legal tender currency notes in place of unredeemable
trade bills. With these notes the bankers met their obligations
and renewed their trade.

When the war is over the Government will call in the non-
interest-bearing notes, and issue to the Money Kings interest-
bearing bonds. This they will get for nothing in return. This will
be designated compensation for losses. The compensation for
the losses sustained by the men who fought the battle of their
country will beNothing. The soldiers returning; from the war
will be taxed to pay interest to the robbers who stayed at home,
and drew compensation for losses while the nation was
struggling for its life.

Thus British capitalists, manipulating a Government that

functioned in the interests of capitalists, loaded upon the
British people for nothing in returna load of debt almost
equal to the indemnity which the Germans imposed upon the
French nation at the end of the Franco-Prussian War.

And these millions of loot were only part of the plunder.



Gorging the Vultures

These are the men who, without virtue, labor or hazard, are growing rich as their country is
impoverished; they rejoice when obstinacy or ambition adds another year to the slaughter
and devastation; and laugh from their desks while they are adding figure to figure and cipher
to cipher.

Frank Hirst. Editor of the Economist, in his book, The Political

Economy of War.

The gigantic scoop of August 13 was not sufficient. That scheme

gave the banks compensation on all pre-war debts. By what are
known as the 4th September arrangements, a new and larger
scheme of plunder was devised. Stripped of all verbiage, gloss,
glamor and mystification, it amounted to this:

All had debts contracted by banks between the 4th August, 1914,
and a year after the end of the war, will be made good by the
British Government, and added to the National Debt.

This dose was hard to swallow. The Economist, in its issue of

September 12, said:

There is much to be said for compensating banks, discount and accepting

houses for their losses, but in equity one person who has been ruined through
no fault of his own has just as much right to be relieved at the taxpayers
expense as another person.

The result, from the standpoint of the great financial

establishments, was magnificent. The gold basis upon which they
traded and drew profits had failed in the hour of need, but no
matter. The State had come to their rescue. The State had taken
over their losses. It had given them a State-guaranteed currency.
It borrowed back that currency with interest. After the war, it
would add all bank losses to the National Debt, give bonds as
compensation, and pay interest thereon.

PILED PLUNDER.

When the 4th September plunder scheme became known, Robert

Blatchfords paper, The Clarion, (Sept. 11) came out with this
statement:

Other auxiliaries to the Gold trust will shortly come bobbing up and asking
for the National Credit to help them on their felonious way, and these credits
and guarantees will continue to be freely bestowed. That notorious
highwayman, Dick Turpin, and the Heathen Chinee, were not in it with these
thieves of to-day. Why, the game of Under which thimble the pea becomes a
standard of high and honorable con duct compared with the chicanery going
on under the very eyes of the fleeced ones. The people of England have been
robbed, are being robbed, and are about to be further robbed on a larger scale
than any recorded in history.

The Clarion spoke true. Not the robber scheme of August 13

nor that of September 4 could satisfy the felonious hunger of
those who stayed at home to rob while others went abroad to die.
Not enough that they had loaded the living with debt and
fashioned new chains of servitude for the unborn. The tigers had
tasted blood. All the retainers and hangers-on of the Kingdom of
Finance must come into the feast.

In the same issue of the Clarion Richard Temple said:

Having backed the shareholders in the banks, the Government is preparing,

in obedience to the financial Press, to back the members of the Stock
Exchange.

And it was so.

THE STOCK JOBBERS.

The Economist of October 3, 1914, said: They are

waterlogged with unsaleable securities.

Under this new scheme the Stock Exchange operators (who gave
such a jubilant reception to William Morris Hughes) could
deposit their water
logged securities in the Bank of England, and
draw credit to the extent of 60 per cent, of the value of such
securities as at the time of the closing of the Stock Exchange.

The credit thus secured was actually more than the money they
could get if compelled to sell.

Against these credits they could draw by cheque. If till money

was required, they could draw a portion of the 100,000,000 of
notes issued by the British Government.

With these credits and Government notes, obtained by a

deposit of their unsaleable securities, they were able, to resume
business and patriotically lend to the Government at interest the
currency that the Government had created.

THE GREATEST ROBBERY IN HISTORY

The editor of the London Investors Review (September 19)

stated

Credit is being created against unexisting assets in amounts of

unprecedented magnitude at a time when the ordinary uses for
it are unusually restricted.

These things are done, said the Investors Review, to support

the money market. It added:

These credits are called into being either in the form of

notes or in the shape of advances by the Bank of England
under Government guarantee.

Thus the British Government advanced credit to men whose

credit was dead upon securities that were valueless. Then,
because the ordinary channels for the investment of money were
unusually restricted, the Government for the found a field of
profit for the profit-mongers by borrowing the credit called into
existence by the Government from the very men to whom the
Government had given credit upon unexisting assets.

IN ALL THE WORLD THERE NEVER WAS SUCH A ROBBERY

THE ROBBERY OF A NATION STRUGGLING FOR ITS LIFE.

The nation needed food, clothing, guns and ammunition to carry

on the war.

If a legal tender currency note was good when issued to bankers

for com pensation or to stockjobbers as a circulating
representative of unsaleable securities, it was equally good if
issued to the industrial community as a circulating
representative of the nations obligation to those who supplied
the requisites of war.

But the British Government that issued legal tender notes for
the salva
tion, use and profit of the private banks would not
issue legal tender notes for the salvation, use and profit of
the nation.

The Government issued interest-bearing bonds and debentures,

and called upon the financiers to subscribe to the war loans.

VAMPIRE PATRIOTS.

But the financiers had no credit outside of that guaranteed by

the Government. They had no currency outside of that furnished
by the Government. How could they subscribe to the loans?

They did it by lending to the British Government the legal tender

currency notes that the Government had previously given to the
banks and financiers as compensation for commercially rotten
bills and waterlogged securities.

As a result, there went into the vaults of the private banks

debentures and bonds armed with the privilege to suck for ever
millions per annum from a people struggling on the battlefields
of Europe to maintain the national life. And while they were
struggling, the bonds of slavery for the survivors were carefully
stored for suckage in the vaults of the vampires.

There might have been some justification for saving the banks
and great financiers from ruin, on the ground that their ruin
would have involved all in a common disaster.

But what justification was there in furnishing insolvent

institutions with a currency to enable them to loan that currency
to the Government that gave it, and to make a profit from the
war? It was pitiless robbery.

On December 22, 1915, Lloyd George, in reply to a question in the

House of Commons, admitted that the State aid to financial
institutions reached up to nigh 200,000,000.

Nobody ever heard of a Government that guaranteed the

workers against loss. But the Kings of Finance must not only be
saved, their power of robbery must be extended, their riches
augmented, and the toiling multitude ground in the mill of
financial servitude.

The New Bondage

This war will make bondsmen of us all, and the economic rule of the bondlordsthe greatest
oligarchy the world has witnessedwill become absolute.

Henry Slobodin, in the International Socialist.

The most important lesson of modern warfare is the fact that a knot of men, financiers,
politicians and profiteers, can capture the mind of a nation, arouse its passion, and in the
name of patriotism impose a policy of slavery.

John A. Hobson, Evolution of Capitalism.

NATIONAL CREDIT.
The London Observer of September 26, 1914, said:

The Government is proved to be the ultimate supporting

influence of credit.

In its issue of October 3, 1914, the Economist pointed out how

utterly futile gold The Reserve is useless as the basis of credit.
The proved basis is the credit of the Governmenti.e., of the
country.

Yet that Government paid interest for a credit that was not only
inferior to its own, but incapable of existence without the
vitalising power of national sustenance.

EGYPTIAN BONDS.

On October 7, 1914, the London press announced that, as it was

not possible for the banks to follow usual practice and ship gold
to Egypt to finance the cotton crop, the British Government had
come to the rescue. It had authorised the Egyptian Government
to accept from the banks deposits of Egyptian bonds, and issue to
them a note currency based on bonds. With this currency the
cotton growers were paid.

Yet this, that a Capitalist Government could do for capitalist

banks, this issue of notes on the security of national bonds, a
Labor Government and Labor party in Australia (in 1915)
rejected as absurd, as impossible of application for the
benefit of a nation.

PAPER MONEY FOR LOANS.

The Economist, of October 10, 1914, said:

Funds wherewith to subscribe to the War Loan can be

obtained by pledging investments for paper money

This privilege was for the great financial houses only. The Bank
of England is a bank for banks, and not for the general public.
The average citizen could not lake his securities to the Bank of
England, draw notes, and with these notes subscribe to a new
loan.

The Investors Review, of October 24, 1914, said:

Out of this great mass of credit, created under Government

guarantee, the means comes with which to subscribe to
national loans.

The Round Table, of November, 1914, said:

The British Government has given the private banks most

generous aid. It has liquidated their bills and securities by giving
them credit on the Bank of England. Upon these credits they tan
draw, and with these credits contribute to the War Loan.

The Round Table went on to say:

One can observe, therefore, the curious process by which

the Govern
ment lends its credit.

And it might have added:

Yes! and the curious process by which it borrows it back,

with a perpetual blister of interest upon the struggling
masses.

MORE PLUNDER.
But another plunder scheme was in process of hatchment.
Through all the early months of the war the great banks and loan
agencies were putting the screw on the public, refusing banking
facilities to men with undoubted securities, and compelling the
general public, in urgent need of currency, to sell their holdings
on a falling market.

Thus, amongst others, vast millions of British Consols, in which

the thrifty had invested their savings, fell into the hands of the
market riggers.

The schemers knew that, because of the thousands of millions of

inevitable war debt, low priced Consols would not be redeemed
in their time and generation. They did not buy to hold for
redemption. They bought to make Consols earn from the
bleeding nation a higher rate of interest.

FIRST WAR LOAN (1914).

The Financial Houses, having inside knowledge of the conditions

under which the 350,000,000 loan was to be floated, got their
corner on 2 per cent. Consols. They were forced below 60. At
that price they were bought by the riggers. Then they jumped to
65. At that price they were converted into 3 per cent, war loan,
worth 66/13/4, with the right of conver sion into higher-priced
loans at a later date. The clear profit on this deal was measured
in millions.

A writer in the Nation said:

For a country that had no hope of redeeming its loans for

long years, it was a barefaced confidence trick, and the
Government was a fraudulent trustee of the public
interests.

SECOND WAR LOAN (1915).

Then came the big float of 600,000,000 patriotic loan, at 4 per

cent. The first loan performance was repeated.

There was the same withholding of bank credits to the public, the
same organised depreciation of Consols, the same organised
purchase, the same inflation after possession, the same
conversion after possession into high-priced securities. The
process of public robbery was repeated on even a more gigantic
scale than on the first loan.

The general public, who had not already been gouged out of their
Consols, could not convert unless they possessed means to
subscribe to the loan floats. They could not pledge Consols for
credit at the Bank of England. This could only be got after they
had sold to the spielers in the ring. Bank of England facilities
were for bankers and brokers onlynot for the general public.

The Fortnightly Review, August, 1915, said:

Advantage has been taken of the opportunity for nimble

stock ex
change dealing by a class of men who do not think it
unpatriotic to utilise a great patriotic occasion for their own
sordid ends.

Dealing with this second loan float, the Economist (June 26,
1915) pointed out that the patriotic robbers had added another
20 per cent, to the interest rate on Consols, and that holders of
the 3 per cent, loan will now receive interest at the rate of
5/4/9 per cent.

And for this crowd of harpies men were rotting on

battlefields.

In this case the previous loan bonds were deposited in the Bank
of England, and upon these deposited securities credit was given
to the extent of 95 per cent, of par value.
It was a paper cheque currency based on bonds, and with this
cheque currency the subscriptions were made to the loan.

The Financial News reported that:

The Bank of England lent 95 per cent, of face value against

deposit of bonds.

The Quarterly Review said:

The war loan bonds are made the basis of the most easy
borrowing from the Bank of England.

With currency based on previous war bonds the financiers

contributed to the 600 million loan.

Oswald Stoll, in his book, The Peoples Credit, said:

Three banks and two insurance companies answered for

100,000,000. They were able to invest such an amount because
the Government had backed them by the credit of the whole
people. Saved from bankruptcy, they were permitted to place a
tax of millions per annum upon the nation that had saved them.

The Times History of the War (page 251, vol. 7), says that the
joint stock banks (saved from ruin a few months previously by
the paper currency of the nation) subscribed over 200,000,000
to this June loan.

And upon this currency, issued by the nation, they draw interest
in per
petuity.

And, as the war went on and the rate of interest rose, so were all
previous loans raised to the higher price, as a premium and a
bonus to the Loan Float
ing Profiteers.

FINANC1NG 1916.

After the exhaustion of the proceeds of the second loan, the war
was financed by the banking houses to the extent of nearly 1000
millions, on short dated loansTreasury Bills and Exchequer
Bonds. For these the Government paid interest up to six per cent.

The English Review (March, 1917), in an article entitled,

Lesson of the War Loan, said:

Mr. McKenna was merely a puppet of the Bankers. He did what

-
ever he was told.

THIRD WAR LOAN (1917).

Then came the Equality of Sacrifice Government, under Lloyd

George.

From this Equality of Sacrifice Government came the Great

Victory Loan of 19171,000,000,000.

Under this all previous financial swindles were outclassed and

eclipsed. All previous 2, 3, 4 per cent. loans were converted
into 5 per cents.

The holders were under no obligation to subscribe to the new

loan. They simply gave notice of their intention to convert at 5
per cent.

For every 100 of second loan they got 105/5/3on the third loan,
so the actual interest was 5 per cent.

Conversion (apart from new money) covered the first and second
loans, and reached close up, to 1000 millions.
Steads Review said: That means the Government will have to
pay stockholders 10,000,000 more a year additional blood
moneyupon old loans.

BACK TO SLAVERY.

Thus the schemes of the plunderers grew. Every day some new
device. Take useless German bills to the Bank of England, get
credit, draw notes, invest the notes in British bonds, deposit the
bonds in the Bank of England, draw 95 per cent currency, make
this the basis upon which to issue fresh supplies of credit, and
grant additional loans to the Government. Transfer loans at 2,
3, 4, 5, into 6 and 7 per cent, as the war goes on. Get richer
and richer. Pile up the burden of the peoples bondage.

Thats High Finance.

Never had the Lords of High Finance gathered such a harvest.

Their loot surpassed in its immensity the greatest scheme ever
evolved from the cutest group of Yankee grafters. Never in the
wildest dreams of avarice did they imagine that they could get a
British Government to function so heartily, extensively and
exclusively in their interests. With them, as with the German
Junkers, the toast was To the Day, and their day, the day of
speculative opportunity, was while the nation bled on
battlefields.

The Dawning Slavery

A tremendously powerful financial oligarchy is de veloping in the shadow of the war, the like
of which has never been known in the world beforepossess ing more wealth, more power,
more control over the destinies of the human race than any class or caste ever possessed.
Beside this oligarchy, the old Roman Senate and the Venetian Council of Ten fade into in
significance. After the war the attitude of this oligarchy towards the workers will be ruthless
and terrible.

T. Quelch, in London Justice, March, 16, 1916.



The great financiers are running every Government

irrespective of party labels. In every country they devise ways
and means; they advise, and Governments are their executors.
In every land, under every party, the shackles of the most
degrading slavery are being rapidly forged. In every land the
leechery of the bondholders becomes an increasing drain on the
vitality of the people. What use, said Chaumette, is a
constitution to a nation of skeletons? And what, use is
democratic power, when its only re sult is the elevation of men
who complacently walk in the footsteps of their predecessors,
aping the manners, using the language, and pursuing the
methods of the men they have derided, denounced, supplanted,
and slavishly imitated? Thus we are faced with the fact that the
ruling political party in every land is a mere instrument of the
Money Bag, devising for Money Bag interests a national currency
to be lent back at usury to the nation that created and sustained
it. Such are the Morals of Robbery and the ethics of the poli tical
jugglers.

Great Britain is now (1917) spending 3,000,000,000 per annum

on the war. Yet the more the banks lend the stronger grow their
resources. They can lend ten, fifty, a hundred times the amount
of gold in their vaults, and yet the gold remainsthe only limit
on loans is the capacity of the people to carry the load of
interest.

The currency created by the nation for the salvation of the banks
is loaned back to the nation at perpetual and ever duplicated
interest.

The Round Table, in its article on How Wars Are Financed

(June, 1915), said:

There must be sufficient time between the instalments of loans to allow the
proceeds of the first to be expended by the Government, to pass into the hands
of private persons and to filter back to the banks before the next instalment is
called. If this condition be fulfilled, the nation go on fighting for ever, as far as
finance is concerned. In other words, if these conditions be fulfilled, the banks
can go on lending for ever.

Thus currency goes out in wages to soldiers and makers of

requisites of war passing along the channels of trade back to the
banks for the next in
stalment. Thus the circle is complete. To the
onlookers, there is a never-ending procession of cash. It is
financial legerdemain. By it nations are deluded, defrauded and
enslaved. Thus thousands of millions are loaned, yet as much
remains in the vaults of the great banks as before the first penny
was floated. With every new war loan the rate of interest, the
rate of blackmail, upon the struggling nationalities, is increased.

Thus in 1917 all previous 2, 3, 4 Per cent, blood loans were

convertible into 5 per cents, to all subscribers to the Great
Victory Loan Floatever rising patriotism of the Parasites.

AFTER THE WAR.

The war over, and the people under the burden of millions of
interest, profits flow once more into the channels of industry at
the higher rates of interest created by the war.

Out of the war will come for ever annual dividends in the
shape of interest upon the money invested in blood. For this
the people must toil.

Out of the war will emerge two classesBondholders and slaves

to the Bondholders.

Lord Inchcape, President of the National Provincial Bank of

Great Britain and London director of the Australian Sugar
Shipping and Banking Combine, known as the Burns, Philp
Company, said:


The heavy taxation in which Europe is involved to pay the interest on the
money already borrowed, and on the hundreds of millions yet to be raised,
will press heavily on the people. Their purchasing power will be reduced and
their standard of life lowered.

England must recover herself in the markets appropriated by

neutral nations, by nations upon whose industries sit no war
burden. Whatever goes to the bondholders, must come out of the
flesh and blood of the workpeople. So

The standard of life must be reduced,

The arms of Britain, France and Russia may be as triumphant as

those of Rome in the days of its greatest gloryyet the workmen
of all the com
batant nations will emerge from the war steeped in
such awful poverty, such abject slaves of Mammon, that they will
wish they were dead.

All who come out of the war alive must be bled dry that interest
mongering vampires within the nation may extract from the
products of toil hundreds of millions per annum.

Lloyd George, speaking in the House of Commons (May 12, 1915)

said:

Distress, Misery, and Wretchedness always follow a great

war.

The English financial journal, The Economist, commenting on

the Lloyd George speech, said:

The standard of life must be reduced.

In Australia interest and other charges, arising out of the war

will increase the burden of taxation fourfold.
Productive and distributive costs will be augmented, prices will
rise to the level of the increased costs, purchasing power will be
correspondingly diminished. The returned soldiery, thrown
suddenly upon a depressed and dislocated labor market, will
engender amongst the wage-earners an agonising struggle for
existence.

Distress, misery, and wretchedness always follow a great

war.

Awful is the price the workers must pay, so that Shylock may get
his bloody shentage. He will draw blood from sweating brows
and hungry mothers all the days that God gives them life. This
war weakens the workers and strengthens the Money Bags. This
war means misery for the toiler, and much monish for the
bondholder.

This war makes the living worker a slave, and fills the treasury
of Shylock to overflowing.

Workingmen! You shall eat lesshave poorer foodshabbier

clothesscantier furniturefewer pleasuresand know more
hardships than ever you knew in all your days and generation.

You want to know Why?

Is it not plain? If every year Shylock is to draw hundreds of

millions more in interest from his investments on wasted lives
and bloody slaughter, you who remain alive must slave for it and
pay for it? All your days shall be made bitter with hard
bondage. That is your future, workingmen. That is what they
mean when they say the standard of life must be reduced.

The workers come back from the war doomed to toil and pay
annual tribute, not to a foreign conqueror, but to a small
exclusive moneyed clique within the nationthe Kings of the
Kingdom of Shylock.
These are the conquerorsthese Lords of Finance. Beneath
their yoke must men of all the nations tread.
The hapless producer of wealth goes forth into a night
illuminated by no starhe travels in a desert where the ever
retreating mirage makes his disappointment a thousandfold
more keen.

The Profiteers Programme

The banking system as it now stands is a dis

grace to civilised communities. It places in the
hands of a small committee, the Bankers Association, a power greater than that of
Governmentwithout its responsibility to the country.

Gilmour Brown, Victorian State Commission on Banking, 1895.

TORYISM.

In 1893, during the Australian banks smash, the Governments of

the various States rushed eagerly to the assistance of the afflicted
corporations.

In Queensland, the Government, of which a majority were bank

directors, substituted a State Note Issue for the discredited notes
of the private banks. The new issues threw the responsibility of
redemption upon the Government, and relieved the banks from
the necessity of keeping a corresponding amount of gold.

In Victoria the Government guaranteed the private note issues.

The Argus urged the Government to go further. It said (May 16,

1893) that the Government should issue notes upon the security,
of deposit receipts. In its issue of June 9 it stated that banks
should be allowed Government notes to meet liabilities. It
buttressed its arguments with the statement that the Bank of
England issued 16,000,000 in notes outside any gold basis.
When the Federal Labor party came into power in 1910, the
Govern ment, under Mr. Fisher, introduced the Australian Notes
Bill, This was an application to all Australia of the Queensland
note scheme, as originated by the Tory Government of that State
in 1893.

But the adoption of the Queensland Tory expedient of 93the

expedient whereby legal tender currency, is given to private
banks for the temporary use of gold that flows through the
channels of trade back to the banksthat was no part of the
Labor programme. It could not be, it cannot be, else between
Tory policy and Labor policy there is no difference.

The only justification was that of emergencythe emergency

existed The Labor Party of 1910 was confronted with an empty
Treasury and it half a million deficit. It needed to raise money
quickly. Instead of interest it paid the price to the banks in a
Government guaranteed note, legal tender for all their
obligations.

LABORISM.

The emergency measure was good, provided it was a measure to

give the Labor party time to put its declared banking and
currency principles into operation.

But those principles were put in the dustbin.

The note issue scheme, as devised by the Queensland Tories in

93 was put into force as the accepted permanent policy of the
Australian Labor Party.

I said (June 23, 1910) :

The issue of notes by the National Government to the Associated Banks of

Australia is neither a step forward nor a decent substitute for the sixth item of
the programme of our party; it is a side-step and a subterfuge. It will not
diminish the power of monopoly, but strengthen it. It will put behind the
private banks a credit they do not now possess. It will rid them of their
obligation of note redemption, and place it upon the Government. It will make
the notes legal tender for the Associated Banks, but not for the National
Governmentthe Government must redeem in gold. It is a device acceptable
to the Money Power, but for Democracy it is a deception.

For that statement I was denounced as a disgruntled member of

the party, and was told that Labor outside is confident that the
Government will fearlessly do its duty if their supporters inside
will permit them.

The Labor movement let its principles go by the board, and to-
day is paying the penalty.

The clearly understood basic principles of the Labor

movement are those of public ownership.

Those principles applied to banking, imply a system of public

ownership superseding all private traffic in the instruments
of exchange.

The programme distinctly declares that the Commonwealth

Bank, amongst other functions, shall exercise the functions of
issue and reserve.

Without those powers it is an emasculated institution. It is not

the reservoir of the national gold supplies. It is not the tap from
which flows legal currency available to all upon conditions
common to all. It is not the Bank of the Nation, endowed with
supreme powers. It possesses no more power than any ordinary
trading bank.

It is a mere addition to the list of banks enrolled beneath the

peculent banner of the Associated Banks. It is as much a part of
the Capitalist System of Exchange as any private institution in
the land.

STATE CAPITALISM.

I stated in 1910, and I re-state the fact now, that the banking
corporations in every country are favorable to a national note
issue. In every country where they exercise influence they get
the Government to issue notes, not upon gold, but upon bonds,
bills and other securities.

The banks thus shift the onus of redemption from themselves to

the Government, secure for themselves a legal tender currency,
and the mass of gold previously non-productive in their vaults is
made available for export and profit. For a gold-producing
country exportation is always profitable.

The transformation in the methods and mechanism of exchange,

like the transformation in the methods and mechanism of
production, constitutes an economic revolution. The
development of the cheque system has made the old non-legal
lender notes of the individual banks obsolete. They are no longer
a speculative utility.

The banking world seeks a new base, and it gets it in

Government guaranteed notesinstruments of redemption
for all their obligations.

Under this new systemseen in Japan, Germany, France, and

Americagold ceases for internal currency. It is held for
international traffic only. This economic progression should be a
Nations Benefit, not a Burglars Kit.

In every country where financial capitalism wields political

power, and where its dynastic dominion is apparently assured, it
has established for this end a Central Bank, designated in many
countries a National Bank, operated, in some cases, by the
Government; functioning, in every case as an instrument of State
Aid to private banks; re-discounting the bills of private banks for
their gain and their salvation.

BANKING COMMISSION.

In 1895 we had the Victorian State Commission on Banking.

There was a Bankers Conference to consider proposals to be put
before the Commission. There were preliminary suggestions, but
the eighth clause stated that if notes issued by the Government to
the banks under the preliminaries were not sufficient, then the
banks were to get notes upon a deposit of 20 per cent, gold and
80 per cent. Government securities. Their ninth clause stated
that, when gold and Government securities were exhausted, the
Government should be empowered to issue to the banks
Government guaranteed legal tender notes upon the security of
ordinary trade bills.

Mr. Gyles Turner, on behalf of the Bankers Conference, told the

Commission that:

Paper money issued by the community on good security is as

sound as the Bank of England.

Mr. Turner did not mean that the Government should issue
currency to every citizen who had good security. He meant
issued to the banksthe banks would do the lending.

Amongst those who appeared before the Commission was Mr.

Gilmour Brown. He had been a bank manager for 22 years
Apart from the statement that appears as a text to this article, he
told the Commission that:

A small irresponsible body reigns over the whole community,

pays its own debts how and when it likes, while it makes all its
debtors obli
gations payable at call.
They (the Bankers Association) levy direct taxes on the
enterprise, industry and production of the community
greater by far than that levied by the Government. They
control our reserves, our rate of interest, our credit, and
possess a more absolute jurisdiction over out livelihood, our
savings, our monetary future, than the Government.

Hon. N. Levi: It is a trades union.

Gilmour Brown: It is a currency monopolya corner in

credit. Gilmour Brown, amongst other things, told the
Commission that the Bankers Association was a close
corporation bound together by the cohesive power of
plunder.

Things have changed since then. Later on we had it on the

authority of Labor Treasurers that the banking corporations
were patriotic institutions deserving the undying thanks of the
community. These glowing testimonials were got without
influence, solicitation or reward.

RUSSELL FRENCH.

Ten years after the Commission of 1895 Russell French, general

manager of the Bank of New South Wales, put forward in the
Insurance and banking Record proposals for a Federal Bank of
Issue (April, 1905).

This Central was to issue legal tender notes to other banks.

There was to be no deposited security. Without security the

banks were to get notes equivalent to 40 per cent, of their capital

If a bank failed, the Government was to have first lien on the

assets.
If a bank wanted notes in excess of 40 per cent., then, and then
only, was security to be deposited.

These securities were to be such as the Commissioners might

approvebonds, bills, deeds, etc.

Not an ounce of gold was to be supplied by the banks to the

issuing institution. Banks were to pay out notesestimated
profits 3 per cent. Of these profits the banks were to allocate 2
per cent to meet expenses of the Federal bank of Issue.

For these privileges the banks would consent to the Federal Bank
issuing to the Government a volume of notes equal to that drawn
by the private corporations, but the Government was to provide
a gold cover of 40 per cent.

Against the total mass of issues to banks and Government there

was to be a gold base of 20 per cent. If the Government did not
avail itself of the privilege to draw notes, then against the notes
issued to the private banks there would be not one ounce of
gold.

PRIVILEGED MONOPOLY.

Thus, with the bankers in Australia, as with those in

America, England and elsewhere, gold is a non-essential, and
legal tender notes of the nation are excellent and desirable,
so long as issued under terms and conditions that treat the
banking corporations as a privileged class. Even a National
Bank of Issue is a favored institute of the corporations,
provided it be made a fortress for the defence of the great
monopolies.
Once again we see that the value of an institution is to be
measured, not by its name, but by getting to see in whose interest
it functions. State Aid to Capitalism is too often imposed upon us
in the name of Labor and the Common Good.

The Australian Money Trust

Control of banks, trust companies and insurances by a small group of Financiers means
their ability to lend a large part of those funds to industries in which they are interested.
They appropriate an ever-increasing proportion of the products of industry. They dominate
the economic situation, and become more powerful than the nominal rulers.

Louis Brandeir, The Peoples Money.

Australia is a country in bondage, nor merely to the foreign

bondholder, but to a small local group financially powerful, and
every day becoming richer and richer and more powerful.
These men control the great industries. They are behind every
pool, scheme, ring, compact and combine. They control the
banking system of the continent, and all the depository agencies
of the people.

They control the insurances and investments of the people.

They control the market upon which are bought and sold the
securities in which a large part of savings banks deposits are
invested.

The savings banks are collecting agencies for the peculative

Money Power.

All liquid savings of the people flow in rivulets to the reservoirs

of the private banks.

The States of Victoria, South Australia, and Tasmania constitute

an economic unity. The economic centre is Melbourne.

The Metal Gang constitute the Economic Junta ruling these three
States. Their names are:W. L. Baillieu, H. C. Darling, Harvey
Patterson, F. C. Hughes, James Harvey, M. C. E. Muecke, Ed,
Miller, Frank Snow, Kelso King, R. G. Casey, W. M. Jamieson,
Edward Fanning, J. L. Wharton, Bowes Kelly, H. H. Schlapp (of
Knox, Schlapp and Co.), and D. E. McBryde.

These men control the lead, tin, silver and copper output of the
mines at Broken Hill, Mount Lyell, Cobar, Cloncurry, Chillagoe,
Moonta Wallaroo and Mount Morgan; control Tasmanian copper,
Pioneer tin and all smelting and refinery works in connection
with the metallic products of this continent.

These men, either directly or through their associates and

business dependents control every bank that has its
headquarters in Melbourne, and nine tenths of the Life, Fire,
Loan and Trustee agencies of the three Southern states. They
dominate, in conjunction with the Sydney section, every loan
deposited in Australia, and every institution that operates a loan.
These men, through their interlocking system of directorates, are
the Brewery Combine, Timber Combine, Dunlops, Amalgamated
Zinc, Dalgetys, Goldsbrough Morts, Emu Rails, Electrolytic
Smelting, Elder Shenton, Elders Metal and scores of others.

The control by this group over the banking, insurance and

mercantile loan agencies of the Southern States is every day
drawing nearer to un
limited and unrestricted monarchy.

This group, in conjunction with the Sydney section, constitute the

financial backbone of every ring, trust, combine and price-
raising monopoly on this continent. Their control of a long chain
of banks, of currency, of the peoples savings in every form,
furnisher them with facilities to finance every industrial
depredation, every market manipulation, every glittering con -
fidence trick of which the multitude are victims.

They control savings, insurances, investments and industrial

capital in the States of Victoria, South Australia and Tasmania to
the extent of some 200,000,000.

They are the economic masters of those three States.

The States of New South Wales and Queensland constitute an

economic unity.

The economic centre is Sydney.

Sugar and Gas Monopolists constitute the Economic Junta ruling

those two States.

Their names are : James Burns, Robert Philp, Adam and James
Forsyth, J. T. Walker, J. R. Fairfax of the Burns, Philp
Combination; Levy, Cohen, Moses and Myles, of the Sydney
Gaslight Monopoly; W. C. Watt, Knox, Kater, Mackellar, Binnie,
Buckland, Cowley, Black and Onslow Thompson of the Sugar
Squeeze.
These men control the 250 branches of the Bank of New South
Wales, the 200 branches pf the Commercial Banking Company of
Sydney, the A.B.C. Bank, the Bank of North Queensland, the
A.M.P., and nine-tenths of the Life, Fire, Trustees and Loan
Agencies that operate in the two States of New South Wales and
Queensland.

These men, by their control of a long chain of banks, insurance

and mercantile loan agencies, are masters of the whole economic
life of the people. They control savings, insurances, investments
and industrial capital of over 200,000,000 in those two States,

The Sugar and Gas Gang of the two Northern States, and the
Metal gang in Melbourne, stand in the same relation to the
democracy of Australia as Standard Oil, the Beef Trust and
the Steel Trust stand to the people of America.

No nation can be really free where such a financial oligarchy

controls the savings and investments of the people.

Yet it was to these mining magnates and market-riggers, to these,

mani pulators of banks and insurances, to these dear friends of
Beer, Sondheimer and Aaron Hirsch, that a Government of Labor
in 1915 went to for advice.

It was to these men that the Labor Government of 1915 went for
ideas on how to save the nation.

Salvation through the pawnshop.

And when you have mortgaged your soul, and assigned your
offspring to bondage, you are asked to console yourself with the
reflection that you have stimulated in the pawnbroker the most
lofty sentiments of patriotism.

At 4/14/4 per cent.patriotism.

Plus a remission of taxation equal to another ten shillings per

cent., making 5/4/4 per cent.
Thats patriotism.mit interest.

It was a Labor policy so patriotic, so national, that the

Argus in its issue of July 16, 1915, gave it its sweetest blessing. It
said:

The fact that the Federal Treasurer (Mr. Fisher) has conferred
with the leading bankers, and others versed in financial
operations, is a guarantee of sound finance.

Thats sound financebecause it was born of the advice of

the bitterest enemies of Labor and of everything for which the
Labor movement stands.

Why not go to land monopolists for advice on a land policy? Why

not go to the slum landlord for advice on housing?

Why not consult sweaters on sweating, pickpockets on honesty,

pros
titutes on purityand establish codes of virtue, honesty and
decent standards of life, according to their ideas and their
advice.

THE MARKET RIGGERS.

Yet to men who traffic in money, as sweaters in sweat, and

monopolists in monopoly, the Labor Government of 1915 went
for advice on how to finance a continent; on their advice the
Labor Party acted.

You could understand these things being done by a gang of

Tories.

But, what the Labor Government did financially was exactly

what W. L. Baillieu, Bowes Kelly, John Grice, Harvey Patterson,
Ed. Miller, Jim Harvey and the rest would have done if they were
in power.
They had no need to be in power. The Labor government of 1915
acted on their advice.

The Unseen Grip

They are a financial absolutism. They levy direct taxes on the enterprise, Industry and
production of the community. They control our reserves, our rate of Interest, our credit, and
possess more absolute jurisdiction over our livelihood, our savings, our monetary future,
than the Government.

Gilmour Brown, Victorian Banking Commission, 1895.

FINANCING A WAR.

When a Governmentno matter where placed or how labelled

is per
meated by capitalist conceptions of finance, the first thing it
does is to call into its councils the representatives of the Stock
Exchanges and the Banks. The second tiling it does is to act in the
manner directed by those whose advice it seeks.

A political party is to be gauged not by its name, but by getting to

know in whose interests it functions.

In Great Britain, when the war cloud burst, the administrators of

the capitalist State hastily called into its councils the
representatives of the great, banks and Stock Exchanges.

In Australia the Government did ditto.

The representatives of the Australian banks and the presidents of

the Stock Exchanges of Sydney, Melbourne, and Adelaide were
called together to draw up a financial policy for the people.

The bankers and brokers were constituted a behind-the-

curtain govern
ment.

From that date, the financial conduct of the Commonwealth has

been in accordance with the advice, directions and interests of
the Stock Exchange presidents and bank controllers of Australia.

And for those services the people of Australia, in the words of

Andrew Fisher, are under an undying debt of gratitude.
(London, March 2, 1916.)

The Labor Manifesto of 1910 had referred to private controlled

banking as one of the frauds by which Capitalism bleeds the
people.

Yet, in 1914, it was to these bleedersnot to Labor principles

that a Labor Government turned for light and guidance.

And the doped organisations made no protest.

The new Governmentthe real Governmentthe Government

of Brokers and Bankerslaid down the law.

It acted in anticipation of a loss of public confidence, of a run on

the banks, on the collapse of the banking system similar to Great
Britain. It assumed the liability to borrow either abroad or at
home. It did not foresee the almost immediate collapse of
German sea power, but it did anticipate a difficulty in getting
away our surplus produce. It assumed, as a consequence, a
serious outflow of gold, in addition to the internal drainage
arising from a loss of public confidence.
Upon these anticipations and assumptions the Brokers and
Bankers drew up the scheme.

SELF-PRESERVATION.

The scheme provided for the Banks, States and Commonwealth.

It be
came an endorsed document, an agreement between the
banks, the brokers and the Commonwealth.

It was as under:

1st. The Banks.

Banks were to get a supply of notes to meet their own obliga -

tions, on the basis of three notes to one of gold. Where they had
only one million of gold to meet calls they were to be provided
with three millions of national guaranteed notes, legal tender
settlement for all their debts and obligations.

The Economist, commenting on the position in Australia, said

(Oct. 10, 1914):

There is to be a sufficiency of paper money to advance to the private-banks

such paper money as they may require. The banks welcome the scheme as
one calculated to relieve any pressure on their resources. It makes it easier for
the stronger banks, as it relieves them of the responsibility of coming to the
support of their weaker brethren.

Thus the sustaining power of the banking corporations in

Australia, as desired by their own representatives, was to be
not gold, but the credit, the guarantee, of the Australian
Nation through its Government.

Finally, all Commonwealth Notes held by the Banks were to be

re
deemed in gold at the end of the war. On the other hand, any
indebtedness of the Banks to the Government was not to be paid
until twelve months after the war. In this case no mention of
gold payment.

For these concessions to the Banks, the Bankers and Brokers

made gracious concessions to the States and Commonwealth.

2nd. Commonwealth to issue notes to States on the basis of four

notes to one of deposited gold. As the States could only get gold
from the Banks, one-fourth of such notes to go to Banks for gold
deposited in the Treasury, and the other three-fourths as credit
to the States.

3rd. Commonwealth to be permitted to issue legal tender notes to

meet military expenditure. For expenditure in England, where
Commonwealth Notes were not currency, Commonwealth to
borrow on the London. The intimation that the Credit of the
Nation stood behind the Banks that legal tender currency of the
Nation would be, if necessary, issued in liquidation of the called-
up obligations of the banking corporations, was sufficient for the
public. There was no lack of confidence, no run, no collapse and
the Commonwealth Notes, drawn by some of the Banks in
accordance with the scheme, in anticipation of a run, were not
needed.

THE RESERVE.

The notes issued by the Government for industrial wages and

soldiers pay filtered through the channels of trade to the
reservoirs of the Banks. The cheques paid by the Government to
contractors and suppliers went to the Banks, who presented for
collection at the Commonwealth Bank, and drew more notes.
Thus the legal tender reserves of the Banks began to grow.

THE RATIO.

In proportion as the stocks of legal tender currency accumulated

in the bank vaults, so did the old-time necessity of maintaining a
ratio of gold to liabilities diminish. Commonwealth Notes
performed the function. They were legal tender. They met all
obligations. They acted for the Banks as if they were gold in
reserve, and upon this basisupon the paper notes of the
Nationthe Banks erected an additional superstructure of
credit for loans and profiteering.

Thus it came about that the original schemethe scheme

whereby the credit of the Government, and the Nation behind it,
was pledged to uphold the credit of the private corporations
was no longer needed. The Bankers no longer feared runs and
collapses. They no longer needed protection and preservation.
The national instruments, the instruments by which credit
could be sustained, had become their propertya vast
accumulation in the vaults of the financiers. Henceforth they
wanted interest-bearing loans floatable on the notes previously
issued by the Government.

Thus, on the advice of the Bankers and Brokers, the men

whose services we should, never forget, the original scheme
the agreement between Bankers, Brokers and Governmentwas,
bit by bit, nullified, modified, and varied, until nothing of the
original remained.

THE RING.

Thus, under the Money Ring in Australia, as under Pierpont

Morgan in America, and the Rothschilds in England, the
currency no longer rested on gold, but on the guaranteed
notes of the Nation. These were to the bankers as gold in
reserve. As such they were used. Upon these as a basis they
piled their credits and financed loans to the people at ever-rising
interest-

The Labor party Manifesto of September, 1914the manifesto

William M. Hughes claimed to-have drawn up, contained these
words:

The Labor party, THROUGH ITS NOTE ISSUE, had created

the very instruments by which credit could be sustained and
the wheels of industry kept moving.

That being so, what need was there for the Commonwealth to
borrow from, and pay interest to, institutions and persons whose
credit was not only inferior to the Commonwealth, but whose
credit was so sustained by the instruments which the Labor
Party had created?

That question was put to Andrew Fisher in the National

Parliament. It was not answered. It never has been answered.

The entire production and exchange of wealth is controlled by a

few men who control the banks and money of this continent.
They are the Metal Gang and Sugar Trust Gang rolled into one.

Their exclusive dominion over the trade and savings of the

people is inimical to the national interests. It is the Black Hand
on all the productive agencies of the land; its power should be
broken.

State Aid to Robbery

The issue of national currency, instead of being utilised for the benefit of the Nation, has
been made an instrument of profit for the financial corporations, irrespective of the effect
on the general national posi
tion.

Edsall, in The Coming Scrap of Paper.

The war largely increased the note issue in every country.

Neverthe
less, notes constitute only a fractional portion of the
currency. Even before the war the governor of the Bank of
England told the U.S. Monetary Commission:

Our currency, except for small change, is in the form of

bank credits, transferable by means of cheques. Government
notes, whether in England or other warring nationalities, are to
the Banks as good as gold. They constitute the reserves of the
Banks, as if they were actual gold. The Economist, of July 10,
1915 said:The greater part of this extra paper currency is held
by the Banks as additional liquid assets, and on the strength of
these extra reserves they have extended their loans and
discounts.

Notes issued by the Governmentnot goldhad become the

basis of all War Loans.

The London Economist (October 10, 1914), said:

War Loans are facilitated by placing abundant supply of

paper money at the disposal of the Banks.

THE ENDLESS CHAIN.

The Government in England, like the Government in Australia,

came on the market for loans payable in instalments. The notes
must be given to complete the circle. They go out to pay the
soldiers, to feed families, to pay the Armament Trust for guns
and ammunition. They out in wages, in payment of goods. They
circulate through all the channels of trade back to the reservoir
of the great Banks, ready for the next instalment or the next loan.
Then out they go againthe same circle, an endless chain, the
self-same notes performing an ever similar duty, piling up an
ever enlarging debt, eternal tax for the people, eternal tribute to
the cormorants.

In Australia, the expanding loans, cheque currency and profits of

the private banks are not based upon or derived from their
diminishing ratio of gold. They are based upon and derived
from the notes created, issued and guaranteed by the
Australian Nation. Upon these notes the vast superstructure of
private banking credit in Australia mainly rests, and upon the
basis of these notes the financial corporations can proceed to
finance the Australian Governmentat interestfor ever and
for ever.

At the end of March, 1917, the notes issued from the Treasury
totaled 47,303,000

This meant an increased issue since the war of 37,450,000.

Of this increase 23,000,000 consisted of notes of 1000

denomination.

These 1000 notes are not, and never were, in circulation. They
are merely I.O.U.s given by the Government to the private
Bankersto the Bankers as good as gold for all loan float
operations.

In addition, the Banks hold notes of smaller denominations to the

extent of 9,000,000total holdings, 32,000,000.

As War Loans were raised in instalmentsnot more than 30 per

cent, at one timethe Banks had sufficient Government notes to
finance every loan.

Whatever notes went out came back through the channels of

trade ready for the next instalment.

When the Banks finance loan alter loan, until the war is at an
end, the banks will still hold the notes, and these notes can only
be redeemed by an issue to the Banks of interest-bearing bonds.

By this subterranean method the Commonwealth notes were

made the incubators of national impoverishment. With every
loan float they went out buccaneering, and came back to the
harborage of the Banks, towing in their rear another pile of
interest gouged from the vitals of industry. These piratical
voyages were repeated again and again.

And for this financial fakery, and because it is the accepted

fakery of our time and country, and because we had not the
courage to break with it, the Nation is looted of millions.

At the end of two years of war (June, 1916), the Banks, after
paying 4,000,000 in dividends, and placing large amounts to
various reserves, held in addition increased undivided assets to
the extent of over fourteen millions.

Surplus of Assets over Liabilities, June, 1916.. .. .. 19,330,000

Surplus of Assets over Liabilities, June, 1914.. .. .. ..5,071,000

Increase.. .. .. .. ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..14,259,000

And, if you ask why one section should give its life, another be
perpetually taxed, and another not only free of tax, but draw
perpetual bloody interest from the toil of the survivors, you are
told you do not understand, that you are a crank, an erratic, a
luny, that the loan loot is populardemocraticsubscribed
to by all classesold maids, widows, etc., etc.

These be brought in to give an air of generosity to robbery.

Everybody can come along, but the few big vultures will tear off
more in one bite than a million flies.

And we went to vultures for advice. Good businessfor the

vultures.

The financial editor of the Herald (August 9, 1915), worked out

the value of the War Loan to big investors as worth 5/10/- per
cent. He worked out the bonus (given to bondholders in excess of
interest) as equal to an annuity of 4/2 per cent.the exemption
from State Income Tax at 4/- in the on 2000 as worth 4/6 per
cent., and exemption from the Federal Income Tax at 2/6 in the
as equal to a gift of 11/3 per cent.
Note the process of a loan. It must be popular. Everyone must
subscribe. Many have credits in the Bank. The credits are not in
gold, nor in notes. They are figures in a book. There is a patriotic
response. Cheques are sent in. Credits are transferred from the
names of many to the name of onethe Government. Should
the Government demand redemption, it will get its own
notes.

If people have not a credit balance for bond-buying purposes, the

Banks will provide them with oneon security.

If people have credits loaned to the Banks

on fixed deposit for one year, or two, at 3 or 3 per cent.,
reloaned by the Banks at 5 or 6 per cent., the Banks will permit
the fixed depositor to draw cheques against credits which the
Banks have already loaned.

Every facility must be given to enable every good patriot to come

in and Win the War with his savings.

Later on the Stock-jobbing Section will knock the bottom out of

these securities. They will buy at 50 what is now sold at 100. By
this process they will transform 4 per cent, into 9 per cent., and
when the market is pumped up they will sell at 100 what they
bought at 50. The financiers fake the market, and scoop the
cream of the peoples thrift.

They float higher and higher on the instruments the

Government has created.

And the Nation sinks deeper and deeper into the mire of debt.
So trammelled, so shackledwith this burden of usury on all its
productiondoes Australia face the future.

A Nations Credit

Capitalism has adopted a paper currency in the form of cheques, and these to-day are
redeemable, not in gold, but in the paper notes of the Nation.
Edsall, in The Coming- Scrap of Paper.

The Labor party elected in 1914 had got as far as it was prepared
to go.

The political leaders, steeped in Imperialism and softened by

nose-rub
bing with gentry of social and financial distinction, had
become Liberals in action.

They were not prepared to put into operation even those items of
the-Labor programme that came within the scope of the
Constitution.

And the political chiefs, substituting their own inclinations for

the prin
ciples of the Labor movement, followed the lines mapped
out by every reactionary Government in the world at war.

When the War Loan of 1913 was under discussion in the House
of Re
presentatives it was proposed as an alternative to the
scheme of perpetual annual robbery :

That Bonds be deposited in the Commonwealth Bank, and that

the Bank place the Commonwealth Government in credit to the
value of the Bonds depositedless cost of administration.

This gave the Commonwealth Bank security for currency issued.

Blood money, in the shape of interest, would be avoided.

Australian industries and Australian workmen would be

saved from the annual indemnity to Shylock.

All that would remain would be the net cost of the war.

This cost could be spread over 30 or 40 years by annual

repayments to the Bank in gradual redemption.
The currency would be a cheque currency, and the further
issue of notes would be unnecessary.

Note issues would not exceed the needs of circulation; the

balance would be Bank credits.

Bonds in the Commonwealth Bank would enable the Governor to

deal with existing Commonwealth notes in the most effective and
economical manner.

BONDS AND NOTES.

When money was plentiful and seeking investment, bonds

could be sold at the higher price. When money was short and
security-holders anxious to realise, bonds could be bought at the
lower price.

The Bonds would only carry interest during the period and to the
extent that they were held by the public, and even that cost
would be minimised, if not obliterated, by the profits made at the
buying and selling ends.

Thus, not only would there be a financial advantage to the Bank

and to the Nation, but the public convenience would be served,
the market steadied, and note depreciation made impossible.

Thus, the Commonwealth Bank would be what a great national

Bank should bethe supreme Bankthe Bank to which all
others are subordinatethe regulator and controller of currency
the agent of national benefit and not of private gain.

Only three men voted for this proposition. The other

Representatives stood solid for the measure that meant a never-
ending annual indemnity to the bondholders, a never-ending tax
upon industry, a never-ending pressing down of the means of life
for the men who toil.
Labor and Liberal were welded together in the holy bonds of
political and financial matrimony.

Both factions were dominated by the Capitalist conception of

Finance. It was akin to two parties, apparently opposed, having
identical ideas on the blessing of land monopoly.

MASSEY GREENE.

The man who put up a solid argument against the proposition

was Massey Greene, from Richmond (N.S.W.).

He admitted, in reply to a query from J. H. Catts, that the

proposition was sound if there was one great nationally
constituted banking system.

But he went on to say that we were faced with existing facts, and
he alleged that, under the conditions with which we were
confronted, the emission from the Commonwealth Bank of a
cheque currency, based on Common wealth Bonds, would be
unworkable and end in disaster.

He said: The bonds will be deposited, the credit will be given,

the Government will draw cheques on the Commonwealth Bank,
the persons to whom they will be given will deposit them to their
credit in private banks, the private banks (through the clearing
house) will present the cheques, the Commonwealth Bank will be
unable to pay, it will go insolvent, and the end will be disaster.

The answer is:

All that the Commonwealth Government, needed to do was to

place the Private banks in the same relationship to the
Commonwealth Bank as are the private banks in England to the
Bank of England.

THE WILL AND THE WAY.

The relationship is set forth in the reports of the U.S.A. Monetary

Commission. It is stated in the words of Sir Walter Cunliffe,
Governor of the Bank of England, in his evidence before the
Commission, It is as follows:

Private banks holding drafts on the Bank of England must

present such drafts direct to the Bank of England to be paid to
the credit of their account in the Bank of England.

Every private bank in England is compelled to accept whatever is

owing to it by the Bank of England in the shape of a deposit
receipt on the debtor institution.

Every private bank can settle its adverse balance with other
banks by a transfer of its credit in the Bank of England, but in the
Bank of England the credit remains.

The liability of the Bank of England to other banks is diminished

by its holdings of cheques and drafts on other Banks. But the
Bank of England can draw off gold and Bank of England notes
from other Banks by presenting such cheques and drafts for
payment. Thus gold hoarding by other Banks can be made
impossible, the supremacy of the Bank of England over other
Banks is rendered absolute, and the power of private Banks to
cripple, trammel, or make insolvent the Bank of the Nation is
made impossible.

In England this practice has been evolved, and is applied by

Bankers for Bankers, for their mutual protection, to prevent one
private Bank getting to the Central Bank to the detriment and
undoing of other Banks.

That which capitalist-controlled Banks can do for mutual

protection, a Bank of the Nation can do for national
advantage.
In every country the Central Bank, no matter by whom owned,
exists as an essential part of the capitalist structure. It is the
agency by which State aid and national credit is secured for
private institutions whenever required.

In Australia, the Commonwealth Bank is a mere addition to the

private banking system. It should be made the great Central
Bank. All others, so long as they exist, should be subsidiary to it.
It should be the Bank of the Nation in fact as in name. It should
be a financial fortress for national advantage. In this direction
the National Parliament has unlimited powers.

For sixty years the American Treasury issued currency to

capitalists Banks upon the security of deposited Bonds.

The original Enabling Act (February, 1863) used these words:

Act to provide a national currency, secured by a pledge of United

States stocks and bonds.

The U.S. notes on bonds were issued for the benefit of the Banks.
In Australia we could have done it for the benefit of the nation.

The German Reichsbank has for years advanced currency on

Government bonds and private securities. In France it is the
accepted that a Bank is merely the holder of securities
pledged for the return circulating medium.

In France deposited securities arc the basis upon which notes are
issued by the National Bank. If notes are not wanted cheques are
drawn and credits transferred.

THE U.S.M.C.

The United States Monetary Commission of 1910, reporting to the

American Government the result of its investigations, said upon
this point:
Bank notes on the continent of Europe are issued mainly against
discounted bills. Notes so issued mean elasticity based on the
changing demands of commerce and trade.

The essence of a sound currency is that every note issued shall

be based upon deposited securities, upon bills that represent
products, deeds that repre sent property, and bonds that
represent the taxable wealth of the community.

Under the existing system the owners of capitalof the loom, the
mill, the plough, of the instruments of production in all their
variety, and of wealth in all its forms have to pay interest to
private traffickers for a currency that represents nothing beyond
the deposited security.

MONEY TRUST GOSPEL.

The Bankers of the world no longer believe that a national

currency, sound and solvent, need be convertible into gold, or
that it can be so con
verted. They only want the public to believe
it. They only want Govern ments to trade in their interest on the
general superstition. They know full well that a currency
convertible into all the commodities that gold will buy is good
currency and sound money.

The Bankers know that an adequate currency backed by gold

alone is impossible. They know that the solid assets of the nation
constitute an adequate backing for any medium of exchange
largely in excess of any that could be required for national or
private commercial purposes.

Capitalism has adopted a paper currency in the form of

cheques, and these to-day are redeemable, not in gold, but in the
paper notes of the nation.
This system should be administered for national advantage, not
private gain.

When the nation controls the monetary system it controls every

indus
trial monopoly in the land.

The Capitalist Arsenal

The structure of modern capitalism throws an ever-increasing power into the hands of men
who operate the monetary machine.

John A. Hobson, Evolution of Capitalism.

The principles which it is necessary for the Nation to courageously apply are used every
day by the capitalist bankers for private gain.

Oswald Stoll, The Peoples Credit.

In all the principal countries the great financiers have instituted

central depositories for gold. In many countries the Central is
named after the country of its locationBank of France, Bank of
England, etc. In some cases the Central is a private corporation
controlled by the directors of allied interests, or it is a private
corporation controlled by the Government, or it is both owned
and controlled by the Government. But, no matter how owned or
controlled, in every country, the Central exists as a buttress to
the private banking system. Behind the system, behind the
Central, stands the capitalist dominated State, ever ready at the
word of command to furnish State aid, pledge the credit of the
nation, and issue additional currency manipulated by the
capitalist controllers of the system.

Gold has disappeared as an internal currency. It is no longer

money. It is a stored productstored for international
traffic.

Baron Brencard told the American Monetary Commission that

the Bank of France is the Bank of Gold Reserve for all companies
and corporations throughout the Republic, and the gold of
France is mobilised, ever ready for international economic
service.

Lord Swaytheling told the Commission that the difference

between the Bank of France and the Bank of England was that
the former could pay out silver instead of gold, could refuse gold
for export, or export heavily, and extend the note, issue for
internal purposes, and by these means directly control
international financial and economic relations.

GERMANY.

The Germans had a Monetary Commission in 1908. Von

Wangenheim, President of the Bund der Landwirte, said :

Geheimrat Reisser declares that he is as much opposed to the

indi
vidualist system as he is to the system of State Socialism.
Very well! Between those two systems there is the possibility of
public ownership in the means of exchange with maintenance of
the private ownership of the means of production.

The German Imperial Act of June, 1909, brought the Reichsbank,

the Central Bank of Germany into line with those of France and
Belgium.
The Commission reported that as a consequence of the powers
conferred upon the Reichsbank, all gold flows to the Reichsbank,
and added :

It holds the gold reserves, out of which at all times foreign

obligations can be settled.

Since 1909 great changes have taken place in the policy, powers,
and prerogatives of the Reichsbankthe Central Bank of
Germany. The desire to supplant Britain in the markets of the
world led to the adoption of methods that in other countries
would be designated revolutionary. The Reichsbank acts as
Central for existing private Bankers, but private Banks are
prohibited from establishing new branches. The Reichsbank has
500 branches, and in many provinces is the only giver of credit
in important spheres of economic liferetail trade and
agriculture. The Reichsbank advances currency notes on houses
and other forms of immovable property. Where the credit is
desired for extension, the charge is nominalno more than
sufficient to cover bank expenses. The Reichsbank advances
currency to the Government on a deposit of bonds.

The Reichsbank issues currency for bills on London and

elsewhere. This makes it the almost exclusive holder of credit in
foreign States, and gives it a dominant power over the character
and quantity of its imports.

JAPAN.

The National Bank of Japan is established on similar lines. It is

the Japanese Gold Store. Gold does not go into circulation.
Against general exports the Bank issues Bank credits. It buys
foreign bills and takes the power of collection in foreign capitals.
The Age of July 25, 1916, re
ported:

Japans gold hoard continues to increase. The latest total is

56,000,000. Of that sum, only 17,000,000 is kept in Japan. About
27,000,000 is deposited with Bankers in London, and
10,000,000 in New York,

Thus Japan places its gold reserves wherever they will be of the
greatest economic service. By these means it builds up credits in
the countries of its principal operations. By these means it
enables the importer of the raw material of Japanese industries
to purchase on the favorable terms that such credits permit, and
on the other hand it refuses credit in foreign countries, or grants
it only on terms that amount to prohibition, to all importers who
would import into Japan products and manufactures regarded as
inimical to the internal economic development of that country.

This is a proof of how an internal paper currency permits

gold to be put to its best economic use. It is made an
instrument of credit in the buying market, instead of rust in
local storage. It is a service that should be a profit to the
nation that has made it possiblenot an advantage for
purely predatory interests.

Thus we see how Financial Capitalism dominates all the

industrial operations of the nation. The Japanese method is the
German method, and is now under recent developments the
Yankee method.

It was because of this industrial mastery by Financial Magnates

that Wagenheim told the German Monetary Commission that the
public ownership of the instruments of exchange was a national
need and that:

The banking system should not be treated from the

standpoint of private economics. It is growing further and
further out of the sphere of legal regulations. A Bank to-day
is not merely a businessit is a public office.

Marquis Katsura (Finance Minister for Japan) told the American

Monetary Commission:
Without a National (a Central) Bank authorised to emit
currency, to control the gold resources and collect foreign bills,
national finance and the economic system cannot be consistently
developed.

But when the Financiers and their political agents speak of a

National Bank, the most they mean is a great Central to
function in the exclusive interests of the Financiers. When they
speak of an economic system con sistently developed they mean
the development of a system in which the financial magnates are
the Unseen Caesars and Czars.

AMERICA.

The American Money Trust in 1913 engrafted the latest

developments in finance on to their own system. They have their
twelve regional Cen trals. The New York Central is the
principal Central, and within its grasp is mobilised the gold
supplies of the United Statesmobilised for the international
economic conflict.

The object of gold mobilisation by the financial capitalists of

America is identical with that of Germany and Japanto secure
immediate favorable credits in any country desired

The American Monetary Commission justified this policy on the

follow
ing grounds:

The chief medium of exchange in civilised countries is the

cheque.

For counter change and wages either gold or notes must go

into cir
culation.

Gold in circulation renders effective mobilisation

impossible.
Gold mobilisation is imperative if America is to hold her own
in the international trade struggle.

Therefore gold must come out of circulation and be replaced

by a note currency.

Thus in America, as in Japan, Germany and France, gold has

been withdrawn from internal circulation, not as a war measure,
but as an essential economic process.

In all those countries gold passes to the Central, and against it

nothing is issued except a credit in the books of the Central.

To the extent of that credit, the Central settles the foreign

obligations of the individual Bank, or its obligations to other
Banks.

In not one of those countries does the Central issue notes

against a deposit of gold.

If the individual Bank desires note currency it deposits bonds,

deeds, commercial bills or other acceptable securities.

In October, 1915, Alexander Noyes, writing in the Yale Review

on The Economic Aftermath, said:

Equipped as American finance now is with an elastic and a

scientific currency New York will hold the financial prestige,
which it has gained, and London lost, in the period of war.

Australia is making no preparation for the economic

aftermath. It could if it would, have a banking system, an elastic
and a scientific currency owned and controlled by the Nation, for
the salvation of the Nation.

National Currency

The evolution of the means of exchange which we are witnessing is leading us to a system
of mere clearing of balances.

U.S. Monetary Commission, Document 494.



A national currencya currency controlled by the Nation, and not by private corporations
is the most powerful agent a civilised country can possess; both for the stability of its
internal affairs and for the equitable and guarded conduct of its international trade.

Edsall, in The Coming; Scrap of Paper.

On March 16, 1916, Mr. Dennison Miller, Governor of the

Common
wealth Bank, stated in the New Zealand Evening Post
that

Banking has its own language, not understood by the people,

and not intended to be understood by them.

Mr. Frank Hirst, editor of the Economist, told the American

Monetary Commission (document 579) that the Bankers not only
mystified the public, but obfuscated themselves with obsolete
terms.

Sir Edward Holden, of the London and Midland Banking

Companyone of the men selected by the British Government in
1915 to negotiate the 500 million dollars loan in New York
lectured before the Bankers Institute of Liverpool (December 18,
1907). He said:

Banking is little more than a matter of bookkeepingthe

transfer of credit from one person to the other.

Securities create credits on the books.

Currency is credit in circulation. Currency is money. Money

consists mainly of cheques. Notes are only a fraction of the
currency.

Money is redeemed every time it is exchanged for

commodities or services. It is finally redeemed when it
returns to the issuer in payment of services.
These admissions were made, and these facts made public in
order to buttress the end in view. Sir Edward Holden stood for
the private cheque currency of the private Banks, backed,
sustained, and redeemed by legal tender notes of the Nation
issued to the Banks for securities deposited. Sir Edward Holden
argued, as Pierpont Morgan has argued in America, that legal
lender notes issued to the Banks on the basis of securities, is
sound money. It is. And a national currency-issued from a
National Bank upon deposited securities for national
purposes, or the development of the national resources, is
not only equally sound, but is an imperative national
necessity.

In 1913 Sir Edward Holden urged the appointment of a Royal

Commission to devise means whereby the Bank of England may
be empowered to issue to subsidiary banks legal tender paper
money guaranteed by a deposit of securities.

On February 7, 1914, in a circular letter to the London press, Sir

Edward Holden urged that:

the backing of such an issue should be bills of exchange, such as

are dealt in by bankers every day.

When the war broke out (August, 1914), all pretence of a gold
basis disappeared, and the scheme described in previous
chapters was put into opera tion. In principle it was identical
with that outlined by Sir Edward Holden.

THE GOLD FAKE.

Sir Robert Giffen, the author of Financial Essays, said:

As long as the attention is rivetted on, not the real currency

paper, but upon its assumed basisgoldcorrect conclusions
upon currency questions are impossible.
The writer on Currency in the Encyclopedia Britannica, said:

The idea of the intrinsic value of money is discarded by all

persons conversant with the working of the modern
mechanism of exchange.

Professor Atkinson is reported in the Sydney Morning Herald

(Aug. n, 1914), as saying:

It is a fallacy as common as it is vicious to assume that the

worlds credit is based upon gold. The London Economist
(May 22, 1915) said:

Cash at Call is a fallacy, and the outbreak of war proved it.

In short, the investment of gold, with an economic halo, is one of
the tricks by which Financial Capitalism deludes and exploits the
people.

THEORY v. PRACTICE.

Sir Felix Schuster, president of the Smith s and Union bank of

London said:

The theory of banking is one thing the practice is quite

another. Banking has evolved far beyond the theory on which
it is supposed to be conducted.

And in a speech, reported in the Banking Record (September

21, 1914), he said:

The currency of a country is supplied by cheques instead of, as

the Bank Act intended, by Bank of England notes.

The financial writer, McLeod, says:

Cheques are currency in the same way as notes.

Hartley Withers, in his book on War and Lombard Street, said:

Modern currency is the cheque which can be multiplied to an

extent which is only limited by the security which customers
may be able to provide.

Frederick Temple, in Interest, Gold and Banking, says:

The growth of the cheque system has had the effect of

transforming the character of banking.

Oswald Stoll, in The Peoples Credit, says:

Modern currency takes the form of cheques, with

Government notes for wages and small change.

The 1 Note is the unit of general circulation.

A paper currency is to-day an economic necessity. It exists. We

cannot do without it. It is issued by private Banks. Its
convertibility into gold is a fiction. Yet upon that fiction the
Banks trade, charge interest, and declare their annual dividends.
Modern money is not capital, not property. It is a convenient
circulating representative of wealth in all its forms. When the
manufacturer, the owner of capital, goes to the Bank for money,
he mortgages his capital, and pays interest for a circulating
representation of his own properly.

SECURITY AND CREDIT.

The Round Table, in its article on Lombard Street in War,

says:

The amount of securities deposited in British Banks are worth

over 1,000,000,000. Against these securities cheques are drawn.
Behind these cheques there is not one ounce of goldthe only
security is the security deposited by the drawer of the
cheque.

In Australia the amount of securities deposited in the Banks is

worth 140,000,000. Against these securities cheques are drawn.
In addition to floating mortgages upon the gold in their
possession, the Bankers have issuedat interestrights to draw
cheques upon the Banks to the extent of over 100,000,000
Behind these cheques there is not one ounce of goldthe only
security is the security deposited by the drawer of the cheque

LOANS are given by means of credits.

Credits are given in the books of the Banks to those who

deposit.

Cheques are the paper instrumentalities by which credits are

transferred and wealth monetised. Every transaction is a
transfer of claim on deposited security.

Notes are cheques of fixed denomination guaranteed by

Government, used for wages and counter purposes.

Thats Modern Banking.

Modern Credit is based on the assets, fixed and liquid, of the

whole nation.

Value of total assets in Australia is over 1,000,000,000.

The Commonwealth Bank can, and should, issue currency upon

the securities of private citizens and upon the bonds and
securities that, represent the taxing power of the Nation over all
the wealth of the Australian continent.

THE MONOPOLY.

The Private Banking Monopoly is the greatest monopoly on

this conti
nent. It is the fortress and buttress and financial
arsenal of every indus trial and commercial ring, trust,
combine and price-raising conspiracy on this continent.

It should not be permitted to exist.

It possesses the power to give or withhold credit. It can

withhold or withdraw credit from men whose securities are
beyond question. It exercises autocratic control over the
products and properties of the people of a continent. It is the
Unseen Power. It should be dethroned. Its powers,
prerogatives and perquisites should be the exclusive
privilege of the organised Nation, acting through the agency
of its own instrumentalitythe Bank of the Nation.

The Red Feast

Aye, fight,

And spill your steaming entrails on the field;

Serve well in death the men you served in life,

So that to them the war a profit yield.

In peace.. to your toil,

 In war.. to the teeth of death.

So will they smite your blind eyes till you see,

And lash your naked backs until you know

That wasted blood can never make you free

From utter thraldom to the common foe.

Then you will find

That workers interests, world-wide, are the

same,

And ONE the ENEMY they must resist:

National Redemption

The battles of the nations (sometimes followed by the battles of the national armies) are
to-day fought on the financial field of the great credit banks. Such vital processes, which
may be decisive of the exis tence or non-existence of the State, and of the dis tinctive
civilisation of its people, ought not to be com mitted to the dividend interest of private
banks.

Von Wangenheim, German Monetary Commission, 1908.



A National Bank, supreme over, and ultimately absorbing, all private institutions, represents
the most powerful bulwark for our credit, the security of our people, and the resources of
our country.

M. R. Comtesse, Swiss Minister for Finance.

A National Bank, if it is to be a truly national institution, must control credit or fail in its
duty.

Document 494, U.S. Monetary Commission.

FRANCE AFTER SEDAN.

The Franco-Prussian War of 1870-71 was short and sharp. But it

laid waste a large part of French territory and crippled her
industries. Apart from ordinary war costs and diminished
revenues, France was loaded with a 200,000,000 indemnity to
the German conqueror. Defeated and dis gusted, France swept
out the Third Napoleon and established the Third Republic. On a
higher plane she re-enacted the financial and economic
principles of the Revolution of 89.

From the Bank of France there was issued a paper currency,

during first year after the war, of 65,000,000the next year
another 65,000,000. Money was lent to the peasants to rebuild
their homes, retill the soil, restock their farmsto manufacturers
to rebuild and restart the destroyed factoriesto returned
soldiers to start new enterprises or re-establish the old. The
disbanded army of destruction became an army of production,
poured forth from field and factory and mine-prosperity
returned.

Against the exportable surplus products of her people, France

issued an internal currency, and took the right of collection in
foreign States. Direct export to Germany totalled 47,000,000. The
Bank of France collected and paid off the indemnity to that
extent. Exports; to England 27,000,000, invested in bills in
Germany (or short-dated German loans raised in London),
remitted to Germany, had been paid to the last penny. The
balance was 26,000,000 of French gold shipped across the
border, replaced by paper currency for internal use.

By September, 1873, the indemnity to Germany had been paid to

the last penny. By that means the annual interest of many
millions was saved, and the debt was transformed from a foreign
to a local one. Thereafter that which otherwise would have gone
abroad in interest was used in redemption of obligations to her
own people.

AUSTRALIA.

The basic policy of a reconstructed Australia must he the

transformation of all interest-bearing obligations into non-
interest-bearing obligations.

Only by the removal of this annual suckage of interest from its

industries can Australia hope to ultimately, recover from its
existing condition of financial serfage.

The Commonwealth Bank must be made the Supreme Bank, the

Great Central, to which all Private Banks, while permitted to
exist, shall remain subordinate. This Supreme Bank must be the
only operator in foreign bills. International financial operations
must be exclusively in its hands.

Against general exports this Bank, made in reality a Bank of the

Nation, must issue internal credits, drawable and transferable
in cheques or notes.

It must lake the exclusive power of collection in foreign States,

and build up an Australian National Credit in the capitals of its
principal opera
tions.

Thus it will be in the position to dominate the character and

quantity of its imports, and occupy the most favored position in
dealing with the financial obligations of State and Nation.

BANK OF ISSUE.

The Commonwealth Bank, if it is to properly perform its national

and economic functions must be a Bank of Issue. Issue will
consist of book credits transferable by cheque, or drawable in
notes. A Bank is the holder of security pledged for the
return of a credit medium, drawn and used.

The Government, like the individual, must deposit securities for

credit furnished and currency supplied.

Bills that represent products, deeds that represent property,

bonds that represent the taxable wealth of a country,
constitute a sound base for a sound currency.

The bank of a Nation must advance a currency to Nation, States,

and subordinate Governments upon deposited bondsto the
commercial community on its trading bills, and to the industrials
on homes, farms and factories.

The consolidation of debts and the securement of one Australian

operator on the English market should be deemed imperative.

To that end the Commonwealth should refuse to renew the

subsidy to the States, except upon conditions.

It should condition that the States be financed from or through

the Commonwealth Bank, that the States withdraw as borrowers
from oversea markets, so that the sole negotiator with England
be Australia as a Nation.
A Bank of Issue is the sixth declaration of the Labor partys
pro
gramme.

The Labor Government under Fisher declared in the Bank Act

(8th clause) that the Bank should not be a Bank of Issue.

Thus the programme was flouted, and the utility of the Bank
diminished.

BANK OF RESERVE.

The Labor Platform declares that the Commonwealth Bank shall

be the Bank of Reservethe storeroom of the Nations gold.

The traffic in gold and the exportation of gold should not be left
in private handsthe days of private traffickers should end.

There should be an immediate abandonment of free trade in

gold.

The mobilisation of gold for international purposes is an

economic neces
sity.

Mobilisation should be the exclusive privilege of the

Commonwealth Bank. It should be the only buyer, the only
exporter.

Mobilised for action, the gold stocks of Australia would be placed

wherever they were of greatest economic service.

That which the financial magnates of America, Japan and other

countries have established for their own protection, should be
established in Australia for the service of industry and the
progress of the Nation.

The Commonwealth Bank would operate State and National

securities at home and abroad, and become the most important
factor in the settlement of international balances.

The Commonwealth Bank would become the Financial Arsenal of

the Nation. It would be the agency whereby all foreign interest-
bearing obliga tions would be transferred into internal non-
interest-bearing obligations, in
terest abroad would become
redemption of principle within Australia, ex haustive
expenditure abroad would become reproductive expenditure
within our own borders.

Only on those lines can National Finance and the economic

system be consistently developed.

National Instrumentalities

No party can long be credited with sincerity if it condemns the trusts with words only, and
then permits the trusts to employ the telephonic, telegraphic and postal instrumentalities of
the nation in the carrying out of their nefarious plans.

W. J. Bryan, April 30, 1906.

There is ample power within the Commonwealth Constitution to

deprive monopolies and combines of their power to exploit.

There is ample power to make them serve the Common Good.

There should be a Commonwealth Licence Law.

Every company and combine engaged in inter-State trade should

be required to take out a Commonwealth licence.
The right to carry on inter-State or oversea trade should be
conditioned by compliance with the terms of the licence.

The licence should carry the right, of public fixation of prices,

public inspection of accounts, prohibition of valued stocks, of
hidden reserves, of excessive profits, or discrimination between
purchasers.

The law under which the licence is issued should prohibit the use
of any Commonwealth instrumentalitytelegraphic, telephonic
or postalby any company or combine engaged in inter-State
traffic attempting to trade without a licence or in contravention
of the terms of the said licence.

The Commonwealth exercises this power against lotteries and

against proscribed persons or firms alleged to be engaged in
selling or trading in material or information alleged to be
inimical to the moral or physical well-being of the citizens of the
Commonwealth.

What the Commonwealth cannot do by direct legislation it does

by the use of its instrumentalities.

The Commonwealth not only exercises this power against

lotteries and gamblers, and traders in noxious matter, but it
extends the refusal of services to all persons and firms declared
to be acting as agents, or aiders and abettors to the firms or
persons alleged to be acting in a manner detrimental to the
public interests. The Commonwealth refuses to pass through its
Customs the products of any firm upon which it lays its ban. It
can interdict all goods Government, or its appointed authority,
declares to be manufactured, trans mitted or sold under
conditions injurious to the public. The Nation exercises its right
to grant the use of its services to those who comply with its con
-
ditions.

The Commonwealth can exercise its powers and use its

instrumentalities as much against monopolies and combines as it
can against lotteries and traffickers in noxious matter.

Moreover, all private banks are directly subject to

Commonwealth law, to its dictates and its penalties. The
Commonwealth has unlimited power to penalise any bank that,
after notice, grants banking facilities to any monopoly or
combine declared to be acting without a licence or in contra
-
vention of its licence.

With a complete nationalised banking system the public control

of the industries and transport monopolies would be absolute
without the use of other instrumentalities. Without banking
facilities their predatory practices would come to an abrupt end..
By the use of the licence system and its control over banking, the
Commonwealth can compel every monopoly and combine to
seek the law, secure its licence, and conform to its directions.

FROM

MANIFESTO
Issued by

Russian Council of Workmen and Soldiers to the Workers of all

countries

(May, 1917:


The Imperialists of all countries are everywhere victorious. The

war has given them, and is giving them, fantastic profits, is
gathering in their hands enormous capitals, and is endowing
them with un heard-of power over labour and over the very lives
of the workmen. For this reason the workers of all countries are
defeated and are making on the altar of Imperialism numberless
sacrifices in life, health, well-being and liberty.

_______________________________________

PART II

Historic Note Currencies

The days are long past when notes were anything more then the fractional part of the paper
currency of a state.

Paul Warburg, Monetary Commission, USA.

The evolution in the mechanism of exchange is as great as the

evolution in the methods of aerial flight and submarine
navigation.

There was a time when notes were the only proper currency, but
the banks have evolved a currency of their own in the shape of
cheques.
At the period of the most of the much quoted note currencies,
cheques were unknown. They did not come into much use in the
United States until after the civil war.

Notes are more used on the continent of Europe than in England,

simply because they are more popular.

The Governor of the Bank of England told the Monetary

Commission that the reason so few notes were used in England
as compared with the continental countries was because cheques
were more widely used.

Notes in the past were the entire paper currency.

To-day they are only a fractional part of the currency.

If all arguments against past note issues were sound and correct,
they would have no application to present day conditions.
Civilisation is the reflex of the triumph of progress over past
errors.

PRE-REVOLUTIONARY CURRENCY

Amongst the quoted examples of currency failure is the case of

the early colonists of America. Those people led a very primitive
existence. They had to struggle against warlike tribes. Banking
methods were crude. They were crude everywhere. Gold was
scarce. A medium of circulation had to be secured. The system
varied in different colonies. In some colonies there was failure
in others, unqualified success.

The colonies of New York, New Jersey and Pennsylvania were on

a paper currency. Their credit stood undiminished. Pennsylvania
currency was based on deeds, bills and warehouse receipts. It
enjoyed the highest degree of prosperity on a paper currency.
In 1773 the British Government prohibited a paper currency in
the colonies. This suppression was one of the causes of the
revolution that broke out in 1775.

CURRENCY OF THE AMERICAN WAR OF INDEPENDENCE.

Fought under the greatest difficulties. The so-called Congress was

not a Government. It had no Constitution, no assets, no taxing
power. It issued a currency to carry on the fight. The ultimate
redemption of that currency depended on-the issues of war. The
currency served the purpose. It fed and clothed and armed the
soldiery. The struggle for independent was successful. Every
penny of the paper currency was honored by the American
Government.

EARLY UNITED STATES CURRENCY.

Some States established State-owned banks. Some were failures,

some were successful. The State Bank of South Carolina,
established in 1812 lasted 58 years, and went out of existence
because of the Federal note tax of 10 per cent.

For the most part banking was conducted by private

corporations, with right of unlimited issue of their own notes.
Many of them had no capital, and repeatedly went insolvent.
There were 1700 private banking companies, and the notes were
poor in make up and easily counterfeited. The money of these
banks got known as Wild Cat, Red Dog, and Stump Tail
money.

It was against the unrestrained paper issues of these banks that

Daniel Webster (1837) made his much quoted statement about
the evils of paper money.
It was in September of that year (1837) when J. C. Calhoun and
Webster were raising in Congress the question of the United
States Bank Charter vetoed by President Andrew Jacksonthat
Calhoun made the following statement in the presence of men
conversant with contemporaneous facts:

Never in normal times, never when received for all debts, dues
and obligations to the Government; never when associated with
a bank kept free from the manipulators of institutions hostile to
its existence has a paper currency depreciated. That statement
went uncontradicted.

In that same debate Daniel Webster said:

I have ever been the enemy of those banks that force their own
paper money into circulation.

John C. Calhoun described the system in existence thus:

The right of making money, an attribute of sovereign power, a

sacred and important right, is exercised by private banks, not
responsible to any power whatever for their issue of paper. Yet
this chaotic private system is quoted nearly a hundred years as a
proof of the failure of a nationalised currency.

THE ASSIGNATS OF THE FRENCH REVOLUTION.

When France rose against monarchy and proclaimed her First
Republic, the nations of Europe fell upon her like wolves. Gold
disappeareda paper currency had to be created. The notes
were based upon the forfeited estates of the nobility and of the
religious houses. Those notes bought food and clothes and arms
for the soldiery of France, sustained them in

[sentence missing]

helped them to defend the Republic and defy the world. With
that money the soldiers brought land from the Government,
bought material for home making, and laid the foundations of
the power of France.

The Assignats were first issued in 1790. England kept factories

turning out counterfeits, as she did during the American revolt.
In 1796, when the Assignats were replaced by Mandats, there
was a counterfeit circulation to the extent of 600,000,000. Yet
the industries of France expanded, her soldiers conquered, her
mothers gave birth to children more rapidly than the battlefield
could devour them. Every paper note was redeemed in land or
products. The long Napoleonic war did not add one penny to the
interest burden of the people of France.

ENGLAND AND PAPER MONEY.

1694. Bank of England started.

1696. Bank failed.

1697. Bank re-started.

1698. Co-operative Banks started.

1708. Co-operative Banks suppressed.

1715. John Coleman Bank issued notes on security at 3 per
cent.principal

repayable at 5 per cent, per annum.

1741. John Coleman Bank suppressed.

1793. War against French Republic commenced.

1797. Bank of England suspended gold payments. Bank of

England

notes increased under Government guarantee from 9 to 27

millions.

Doubleday, in his Financial History of England (page 137), says

that the Pitt Government lent several millions of this paper
currency on goods or personal security, the whole of which was
faithfully repaid.

There being no law against private note issues, the private banks
in
creased their notes from 7 to 50 millions.

These notes depreciatedGovernment guaranteed notes did not.

Allison, in his History of Europe, says that the non-interest

bearing irredeemable notes issued under Government
guarantee, receivable in Government revenues, remained at par
with gold, and that the purchasing power the Government
guaranteed notes was twice that of notes issued from the joint
stock and proprietary banks.

England was on a paper money basis for 24 years (1797-1821),

and on this basis she conducted 18 years of war.

GREENBACKS (AMERICAN CIVIL WAR.)

War declared April, 1861. Federal Government unable to borrow

either in America or Europe

December, 1861, private banks suspended gold payments but

enormously increased their note issues.

December, 1861, Government issues 12,000,000 Demand

Notes. They were receivable for all debts due and obligations
due to or from the Government. These notes remained at par
value during the whole period of their existence.

First issue of United States Notes (Greenbacks), March 1862

Banking opposition in the Senate refused to permit Bill to pass
unless interest pre-war loans was made payable in gold. To meet
this the Government had to collect import duties in gold.
Merchants with greenbacks had to deliver to bank at depreciated
value to get gold to pay the Government for duties. The
Government gave it back to the banks as interest. On third issue
further restrictions imposed on paying power of greenbacks.
Value further declined. Depreciation was the result of a
conspiracy on the part of the financiers. Yet greenbacks kept the
armies of the North in the field, fed, clothed and armed the
soldiery. When the war was over the Government accepted
greenbacks as full payment for all debts, dues and obligations,
and they at once went to a parity with gold. The total issue of
greenbacks amounted to 90,000,000, of which 70,000,000 are
yet in circulation. They are no more legally redeemable in gold
to-day than when first authorised. The original Act has never
been cancelled or amended. The United States used a paper
money base for 17 years (1862 to 1879), and on that base
conducted years of war.

FRENCH PAPER CURRENCY OF 1871.

This issue was so successful that it is never mentioned by the
critics of a national currency. Their objection is not to a paper
currency. It is an objection to a paper currency nationally
controlled. It is a defence of the existing private control of
currency.

Details of this issue are given on page 66.

AUSTRIA-HUNGARY.

Since 1866 Austria-Hungary has had a legal tender paper which

does not profess to be redeemable in any particular commodity.
It carries a promise on its face that the Government will receive
the paper for all taxes and debts due to it, and as such it
circulates. It has not fallen in value. (See Mulhalls Dictionary of
Prices.)

PRIVATE NOTE ISSUES.

Age, Aug. 10, 1910: Times have been known in this State when
bank notes were being sold at 12/6 in the pound. One member
said that he had seen them sold at a shilling apiece. We know
that the English banks, in the early part of the last century,
caused great loss to the public through the depreciation of their
notes. In America, in 1837, almost all the banks in the country
closed, causing enormous loss through their notes. Again in 1857,
just 20 years later, the same thing occurred. The American
Congress then stepped in to protect the public against this
ruinous private note is the banks.

COMMONWEALTH NOTES.
Commonwealth notes are not redeemable at any bank, private or
public: nor are they, since the war, even redeemable at the
Commonwealth Treasury. The notes now in existence are in
excess of the total gold supply of the country, and, relative to
population, are three times in excess of the greenback issues of
the American Civil War.

War Values
In times of war private property that is liable to be destroyed by
the enemy, and public securities resting for redemption on the
existence of a Government liable to be swept away, will both
diminish in value in portion to the proximity of the danger, and
will recover value in proportion as the danger retreats.

As the enemy takes on the role of invader, so all fixed

irremovable forms of wealth, public or private, begin to
depreciate, while gold, jewellery and other easily removable
forms of wealth rise in value. When England feared the
Napoleonic invasion gold rose to 5/15/- per ounce. On the day of
Waterloo it was 4/13/6. After the victory it receded to the Mint
price of 3/17/10.

In wartime gold is a deserter. It is the first to get out of the war

zone. It is the first to seek neutral territory or a dug-out. It can
only be kept in the firing line by the strong arm of the
Government, and then seeks devious ways of escape. European
statisticians estimate that when war broke out in 1914 over 100
millions of gold went into hiding. All countries in times of
national stress are driven to resort to paper currency. The crime
is in the fact that banking corporations are permitted to turn
national issues into instruments of public robbery and bondage.
In several war periods, as in England during the Napoleonic war
and in America during the first two years of the Civil War of the
sixties, the unrestricted note issues of the private banks were far
in excess of any issued by the Government.


Standard of Value

VALUE, like hate, love, esteem and ambition, is a pure

abstraction. It is vague, indefinable and indeterminate. It is
an attribute of the mind. It is not a substance. It cannot be
fixed, or measured or standardised.

Value, being the accidental varying relationship of one article to

another, no single article can be a standard.Professor Bowen.

A standard of value is impossible in the very nature of things. If

a quantity of gold were placed beside a number of other things,
no human sense could discern their value.McLeod.

Writers who have abandoned the standard of value theory still

cling to the term, measure of value. Value is an ever-varying
relationship, and therefore cannot be measured. Walker.

Values are ideal and can only be expressed in terms of numbers.

One dollar or one pound is the unit of calculation or

comparison. It is a number.Kitson.

See Hong Kong currency, under heading Asiatic Exchanges.

 Money Trust Armies

In every country there is a powerful group of capitalists, firmly entrenched in society, well
served by politicians and journalists, whose business it is to exploit the jealousies of nations
and practice the alchemy which transmutes hatred into gold.

Diplomacy is the tool of the vast aggregations of capital in oil trusts, steel trusts and money
trusts. Where-ever combinations of capital are competing the reactions are exhibited in the
relations of their Governments. For the service of the rival monsters the working classes are
regimented in conscript armiesarmies and fleets are the

material arguments behind financial diplomacy.

Finance is the arbiter of war and peace, the master of despotisms, the unseen power in
democracies.

Brailsford, in War of Steel and Gold.

Unscrupulous speculators see pilfering opportunities in their countrys trouble. They wish
for war as the piratical wrecker on his rocky shore wishes for fogs or hurricanes.

General W. T. Sherman.

Foreign Exchange

The words, foreign exchange, form one of those meaningless phrases which have filtered
down to us through the dust of antiquity.

W. F. Spalding, Associate of the Institute of Bankers, in his book,

Foreign Exchange in Theory and in Practice.

Merchants import goods and pay the banker to pay the foreigner,
merchants export goods and sell their collecting orders to the
banker.

The banker is the money merchant. He buys from the exporter

his right to collect foreign money, and sells to the importer a
promise to pay his debts abroad in return for cash here.

The bankers charge to the importer is the Rate of Exchange.

UNFAVORABLE EXCHANGE.

When a country imports more than it exports, the balance is said

to be unfavorable.

It means that the banker has contracted to pay more debts in a

foreign capital than he has orders to collect on the money of that
capital.

He is short of credit in that capital.

Foreign credit can only be secured by the exportation of

productswheat, wool, metals, manufacturesor by foreign
borrowing. The banker, short of credit abroad, stimulates
exports by paying the exporter a higher price for his bills. Thus
the exporter gets the invoiced price of his bills, plus the premium
granted by the banker.

The banker loads this premium on to the importer, by increasing

the charge for the settlement of the importers foreign debt.

The importer is in the position of a man who has to pay more for
his goods.

Thus unfavorable exchange means unfavorable to the

importer.


FAVORABLE EXCHANGE.

When a country exports more than it imports, the balance is said

to be favorable.

It means that the banker has more to collect in the foreign capital
than he has debts to pay in that capital.

He has an excess supply of credit in that capital. He will,

therefore, give the exporter a lower price for his bill to collect.
The banker wants no more oversea fundshe has plenty. In
theory, he will settle the importers foreign debt for a smaller fee.

Spalding, in his Foreign Exchanges, says it is only in theory that

favorable exchange means favorable to anybody but the
banker. He states:

In theory the importer gets the advantage of the cheaper rate at

which the exporter sold his bill. In practice a proportion or the
whole of the premium goes to the banker.

But, whether the importer or banker gets the benefit, it is

designated favorable.

Favorable means unfavorable to the exporter. He may get

99/10/- for 100 due in the foreign market.

Unfavorable means favorable to the exporter. He may get

100/10/- for 100 due in the foreign market. The terms
favorable or unfavorable are only used in their relation to
the importer. The market has no distinctive jargon for the
reverse action on the exporter.

FOREIGN EXCHANGES ON LONDON. (Cabled each day to

London from Foreign Capitals.)

Price July Price

16, May 17,

Par Values. 1914. 1917.

Paris Francs and cents to 1= 25.22. . 25.17 27.25

....

Berlin Marks and pfennigs to 1= 20.50 No quote.

20.43

Vienna Kronen and hellen to 1= 24.16 No quote.

24.02

Amsterdam Florins and cents to 1= 12.12 11.59

12.10.

New York Dollars and cents to 1= 4.87 4.76

4.86

Montreal Dollars and cents to 1= 4.87 4.78

4.86.

Russia Roubles and kopeks to 10= 95.75 172.25

94.57

The quotations show how much a citizen of a foreign capital

must pay to secure a credit of 1 in London.

Rising rate of exchange is designated unfavorable to the

foreign country favorable to London.

Falling rate of exchange is designated favorable to the foreign

country unfavorable to London.

In the above tables the rates since the outbreak of war have gone
against England in Holland, United States and Canada.

They have gone in favor of England in France and Russia.

RUSSIA.

Russia is the extreme example; 94 roubles is the parity of ten

English sovereigns. Before the war a Russian could for 95
roubles get 10 sterling paid in London. On May 17, 1917, he
would have to pay in Petrograd 172 roubles for an order to
receive in London, or to be paid on his behalf in London ten of
Lloyd Georges inconvertible notes.

But the Russian could only get his order from some bank or
individual in Petrograd possessing credit in London. His 172
roubles remained in Russia in exchange for something in
London. The seller in Russia was the gainer. For his 10 in
London he got 172 roubles, against 95 roubles before the war.
Russia was neither richer nor poorer.

As a matter of fact, Russias foreign trade is at an end. The

exchanges have practically ceased to operate. The present
abnormal rates (May, 1917), represent the anxiety of the Russian
monied classes to sell out local credit for credit in London. The
moment war is over, and wheat pours out of Russia, exchange in
London will fall rapidly to pre-war rates (95 roubles for 10 in
London). In other words, the so-called depreciation of Russian
currency will disappear.

[By the end of June the Russian rate of exchange had gone to
over 200 roubles for London.]

Sir George Paish, editor of The Statist, told the American

Monetary Commission (Document 579):

Apart from sudden catastrophessuch as crop failures, war,

etc., which temporarily reduce a nations exporting powerno
country can have an adverse balance of trade, except for a short
period.

But the catastrophe of war is here. For Russia it means no trade.

For England it means trade at a sacrifice.

America has exported to England munitions and foodstuffs far in

excess of Englands repayment in products.

The American bankers have, therefore, more credit in London

than they have debts to pay.

Therefore, they give the American exporter less American money

for his London order. For a 100 dollar invoice on London they
give 98 dollars in New York.

The exporter makes up his two dollar loss on exchange by adding

that amount to his bill and making it 102 dollars.

The British importer must buy additional dollars at the higher

price, but the men who make the profit are the men and
institutions in England, who, having credit in New York, sell out
at the higher prices offering in London.

Under non-war conditions, English buying orders would fall to

the level of her capacity to pay in products.
But American munitions and foodstuffs are essential to England.
She is driven to sell to American capitalists her holdings in
American industries, and thus disposes of a century of peaceful
accumulation. She pays by draining her dependencies of gold to
send to the United States, the Argentine or other agreed upon
destination. She pays by mortgaging the future of her own
people to American financiers at high rates of interest. She
becomes, in short, an oversea possession of the American Money
Power.

Only by these heroic acts and by these sacrifices does England

get what she wants from America, and only by these means does
she prevent the further depreciation in the buying power of the
English sovereign, as compared with the Yankee dollar.

SOUTH AMERICAN EXCHANGE ON LONDON.

(Cabled each day to London.)

Price July 16, 1914 Price May 17, 1914

Buenos Ayres, Nominal, gold peso 47d 57d

47
---- ----
Actual, paper peso 20

Monte Video, Nominal, gold peso 51d 55

51d
---- ----
Actual, silver peso 50d

Valparaiso, Nominal, gold peso 18d 9d ----

Actual, silver peso 10d ---- 12d

The process of comparison is the reverse of that between

European capitalsexcept Lisbon.
Lisbon is calculated on the South American plan.

The varying methods tend to confuse the student anxious to

penetrate the mysteries.

In Buenos Ayres they say one peso will buy an order on so many
English pennies in London.

If the Buenos Ayres rate is 48 pence, then 5 pesos (237d) will

buy an order for 1 in London (240d.).

If the rate rises to 50 pence, then 4 pesos 80 centavos (230d) will

buy an order for 1 in London (240d.).

Rising Rate of Exchange is designated favorable to the South

American republicunfavorable to London.

Falling Rate of Exchange is designated unfavorable to the

South American republicfavorable to London.

Since the war commenced, all South American exchanges have

gone against London and in favor of the South Americans.

The currency of the South American republics is nominally a

gold peso, but the actual peso of circulation is paper or silver.

The paper peso of Argentine is said to be depreciated because 2

paper pesos are calculated as equal to one gold peso. On that
basis the conversion office will issue notes for gold, or gold for
notes. On that basis the Caja de Conversion will change an
English sovereign into local paper, or back into gold, as may be
desired.

In the majority of the South American States gold is practically

nonexistent, but exchange is expressed in terms of gold.
Argentine is at present (1917) building up stocks of Australian
gold in return for meat supplied to England, and Australia gets
from England paper credit in London for gold shipped to
Argentine.
The peso of Uruguay, local nominal value 51 pence, will (May,
1917) buy an order on London for 55 pence, and the English
importer or Uruguayan wheat and cattle must pay 55 pence in
London for an order on a 51 penny peso in Montevideo. It is not
the value of the local currency, but the ratio of exports to imports
that affect the relations of nations.

ASIATIC EXCHANGE ON LONDON.

(Cabled each day to London.)

Price on July 16, Price on May 17,

1914 1914

Bombay Pennies to one rupee, 15d 28

16

Honk Kong Pennies to on

paper dollar, 22
22 28

Shanghai Pennies to one silver

tael, 29
29 42

Yokohama Pennies to one

silver yen, 24
24 25

The method of comparison and calculation in the two currencies

is similar to that with the South American.

The exchanges have all risen against London and in favor of the
Asiatics.

Exchange in favor of Japan has been kept down by returning the

coupons for interest falling due, and returning for sale
certificates of Japans indebtedness to England.
In India the Mints issue 15 silver or paper rupees for 1 in gold.
Silver in normal times is kept on a fixed par in relation to gold,
by Government control of foreign exchange. Since the war the
disparity in trade balances has been so favorable to India, that
exchange favorable to India has been kept down close to par by
London paying Indian interest and pension bills due in London.

Chinas currency varies with each province. The Chinese tael is a

Chinese ounce of silver; but even the tael weight varies between
provinces. The Shanghai tael is the base of North China
calculations. It is designated worth 2/6, English money. In May,
1917, the exchanges were so favorable to Shanghai that the
Shanghai tael would buy an order for 3/6 in London, or, vice
versa, the London merchant would have to pay 3/6 in London for
an order on the 2/6 tael in Shanghai.

The Hong Kong dollar quoted in the exchange rates is that

represented by the notes issued by the British banks
established in Hong Kong. They are calculated at 1/10 each.
Spalding, in Foreign Exchange (page 131), says:

The equivalent of these notes in terms of gold is, in fact, the

basis of all foreign exchange settlements in Hong Kong.

Before the war one sovereign in London or Melbourne would

buy an order for 11 paper dollars in Hong Kong. In May, 1917,
only 8 dollars. The Chinese merchant, who, before the war, had
to give 11 Hong Kong dollars for an order for 1 on London, can
now do it for 8 paper dollars. The course of trade has been
favorable to Hong Kong, and that is the fundamental fact in
foreign exchangesnot local currency.

Australia is not quoted on the Foreign Exchange list. Canada

appears, but not Australia. Canada is a part of the American
continent, Australia is an appendage of financial London.
Throughout 1917 Australian banks held enormous credits in
England. According to theory, rates should have fallen
Australians should have been able to buy a settlement of their
London debts at a cheaper rate. In actual practice the banks
charged as if no such credits existed. Theory was one thing,
practice the very opposite.

As a matter of fact, bank charges in Australia for debt settlement

in London in no way reflect the financial and commercial
relations of the two countries, nor do they furnish any basis of
comparison with any other country. Australia, by its isolation
from other financial centres, is absolutely at the mercy of its
bankers, and these control all local and foreign relations, and fix
the charges.

Foreign Exchanges and Gold

Sir George Paish, editor of the Statist, told the American

Monetary. Commission (Document 579) that:

Only in countries where banking is in a relatively backward

condition do the precious metals play any great part either
nationally or inter
nationally.

Frank Hirst, editor of the Economist, told the same Commission

(same document) that:

Even among those who actually deal in moneybankers,

brokers, etc.and especially amongst speculators on the Stock
Exchange, many peculiar notions and superstitions are
entertained on the subject of the relationship of nations, more
particularly as regards the influence of gold movements and gold
production upon the money market.

That is to say, the export of valuesbe they wheat, wool or gold

have the same effect on the international exchanges.
What then, it may be asked, is the need of the great Centrals
the capitalist gold arsenals?

It is because foreign exchanges are expressed in terms of gold.

Therefore, international capitalist rivalry makes it unsafe for any
one gang of financiers to be caught short. Thus we see the
development of the Central gold pool.

Stocks of wool or coal could be stored to meet adverse

balances, but they are bulky, slow in movement, subject to
depreciation in quality and variation in value. Gold occupies
small space, can be silently and rapidly shifted, and is accepted
at an agreed upon value in all countries.

And a gold-producing country is in the most favorable position,

and the most susceptible to mobilisation, for national economic
defence.

The less gold used for internal purposes, the more is available for
estab
lishing a gold fortress for international operations.

In theory, gold flows out of a country when the rate of exchange

is higher than the cost of shipping gold. The war has blown the
bottom out of that theory. England pays the higher rate of
exchange in American and Asiatic capitals rather than ship the
balance of her gold from England. She drains her dependencies,
Australia, New Zealand and South Africa.

In theory, Commonwealth notes are exchangeable into gold. The

war has blown that theory to pieces.

In theory, the export of gold from Australia is prohibited. In

secret practice, ships of war transport it to Japan, Argentine and
the United States. From the outbreak of war to June, 1917, not
less than 40,000,000.

Foreign Exchange and Local Currency

The internal currency of a country has nothing to do with
Foreign Exchange.

Fluctuations in Foreign Exchange are caused by the balance of

trade, and not local currency.

Foreign Exchange does not increase or diminish the wealth of a

country, or increase or diminish the totality of its income. If you
want a claim on Hour stocks in London, or want a debt paid in
London, and the cost is 20/- where it was previously only 10/-,
then the rate of exchange has gone against you. In other words,
prices have risen, and around this plain fact the financiers have
built a shelter of mysterious words.

Foreign payments are not made in money, but goodslocal

money takes no part. Gold sovereigns, dollars or pesos are not
accepted on their face value anywhere outside their own
territory. They go abroad as metal, worth so much per ounce,
and on that basis credit is secured in the currency of the country
in which they are sold.

Exchange rates rise and fall under a gold standard, according to

the relationship of imports to exports.

They rise and fall between London and New York with the same
standard, and between London and Melbourne with not only the
same standard, but the same monetary unit.

The Encyclopedia Britannica says:

A paper currency does not interfere with the movement of

produce or the profits of those engaged in international
exchange.

D. A. Wells, in Recent Economic Changes, cites the testimony of

members and directors of English Chambers of Commerce to the
effect that there is no difficulty in negotiating exchange or
conducting trade with countries on a silver or paper currency
base.

Foreign Loans
When the Commonwealth borrows 20,000,000 in London, to
carry on works in Australia, that amount is left on the books of
London banks, acting as branches or agents of Australian banks.

The banks in Australia finance the Commonwealth with local

money to the extent of 20,000,000.

The London banks owe the Australian banks that 20,000,000.

When Australian merchants import goods from London, they

pay the. Australian banks local money to pay their London debts.

With these local monies the banks reimburse themselves for the
20,000,000 advanced to the Government.

The debts owing in London for goods sent to Australia are paid
out of the 20,000,000 credits in London.

Shifting Foundations
In the New York Tribune, of April 1, 1917, John Rovensky, Vice-
President of the National Bank of Commerce, pointed out that
during the war 1000 million dollars of gold had been drawn from
other countries, increasing the gold stocks of the United States to
1900 million dollars. He said that upon this gold base there
rested a credit structure of 28,000 million dollars. In other
words, there was 26,000 million dollars of circulating credit in
the United States that had no gold behind itnothing beyond the
deposited security of borrowers. If this was the position in
America, upon what does credit rest in the countries from which
gold has been drawn?

Mr. Rovensky states:

The credit structure of each country rests upon the gold reserve
held, by the banks of that country.

Yet every country at war is an evidence to the contrary. In every

belligerent State, including Australia, the credit structure is
rising upon diminishing gold reserves.

CurrencyNotes and Cheques

Under the modern cheque system there is no need to issue notes
beyond the counter change and wage requirements of the public.

When cheques or notes are issued from a National Bank, and

such issue is based upon deposited security, the currency returns
to the bank in redemption of such security as it does with private
banks.

So far as the securities consist of State or Commonwealth

securities the National Bank has not only the remedy against
depreciation, but a profit at its disposal. When money is cheap
and plentiful, securities can be sold and the currency contracted.
When money is short and securities are being offered for
currency, the bank can buy, expand the currency, inci dentally
make a profit, and automatically regulate the market. Notes
issued from the Treasury have no such method of automatic
redemption.

It is not possible to make notes circulate in excess of public

requirements. You cannot make gold circulate in excess of public
requirements. Whatever of gold or notes be not required for
circulation will be left on credit with the bank. Therefore, excess
coinage of either gold or notes is a waste.

American Banks
(Read this in connection with article, Mammon, the
Overlord.)

It is not a fact that private banks in America must redeem in

gold.

They can redeem in silver dollars, United States Notes

(greenbacks), Federal Reserve Notes or cheques on the Centrals
(Federal Reserve Banks).

The 1915 report of the United States Treasury, entitled Paper

Currency and Coin, says:

Silver dollars are legal tender at their face value in payment of

all debts, public and private, without regard to the amount
Silver dollars are not redeemable.

Page 59 of the Treasury Report says that Federal Reserve Notes

can be redeemed in lawful money. Lawful money is silver or
greenbacks.

There is no legal obligation to redeem greenbacks in gold. Page

36 of the Treasury Report says:

The law of non-redemption has not been repealed.

Federal Reserve Notes are guaranteed redeemable in gold at the

Federal Treasury in Washington, but this guarantee is
conditional by the terms if available. This problematical
redemption means, for the vast majority of the citizens of the
United States a train ride of over 1000 miles to Washington.

Page 48 of the 1915 United States Treasury Report states that the
National Bank Notes, Federal Reserve Notes, United States Notes
(greenbacks), Silver Certificates, Gold Certificates in circulation
total 2752 million dollars, against a gold reserve in the Treasury
of only 209 million dollars. The bulk .of the gold stocks in the
United States are held by the private reserve banks, while the
nation is pledged to guarantee all notes, public and private.

In law the Federal Reserve Banks must hold 40 per cent, of gold
against their note issues.

But this is conditional by the fact that lawful money (silver or

greenbacks) may be regarded as gold reserve. Further, that Gold
Certificates (the American ^5 note) may also be regarded as gold
reserve. Neither the individual member banks nor the Centrals
(Federal Reserve Banks) are under any obligation to pay in gold.

Further, the Federal Reserve Banks are not limited to note issues.
They may issue to member banks unlimited credit and cheque
currency upon general securities, without reference to gold
basis. The American financial writer, Alexander Noyes, says:

The Federal Reserve Banks furnish credit to member banks on

securities previously deposited with member banks by the
borrowing-public. The currency, whether furnished by the
member banks to the public, or by the Federal Reserve Bank to
member banks, is in the form of cheques. Note issues are only a
fraction of the total currency issued by Reserve Banks. Cheques
and notes are the circulating representative of deposited
security.

The modern American financial system recognises deposited

security as a sound basis for currency and holds gold in the great
Central pools for international emergency.

Australian Banks
During the year ending June, 1917, the bank returns showed a
remarkable reversal. Apparently liabilities had increased by
17,351,000, while assets decreased by 7,230,000an apparent
reversal of 24,581,000.

The explanation is that the banks only disclose to the

Government Statis
tician their liabilities and assets in Australia.

During the year the total gold production was sent overseasto
Argen tine, Japan and United States. Gold reserves in the Treasury
were depleted for a like purpose. Gold holdings of the private
banks were depleted and exported to the extent of 5,000,000a
total gold exportation of 15,000,000 for the year. For their share
of the exportation the private banks received credit in London,
and to that extent their local assets disappeared.

In addition, the British Government agreed to buy 3,000,000 tons

of Australian wheat for 26,600,000. In reality the deal was
financed by the local banks. The farmers deposits grew, and the
local liabilities of banks to depositors correspondingly increased.
The banks were repaid with British money, put to the credit of
the banks in London. Bank assets corres pondingly increased in
London.

The surplus of bank assets over liabilities in Australia and

overseas were:

June 30, 1917 .. .. .. .. 26,447,000

June 30, 1914 .. .. .. .. 5,071,000

Increase during three years of war .. 21,376,000

Of these increased assets, 14,640,000 was represented by

increased local holdings in Commonwealth, State and Municipal
securities, and the balance in Imperial War Loans held in
London.
During the three years ending June 30, 1917, the banks increased
their holdings of Commonwealth notes by 25,910,000total
holdings, 30,947,000

The total issue from the Treasury to that date was 47,202,000.

The gold in the Treasury on that date was 15,245,000, and in the
private banks 22,855,000total, 38,100,000.

In June, 1914, the banks held in Government securities,

7,377,000. In June, 1917, apart from Imperial War Loans held in
London, the local hold ings in Government securities were
22,016,000.

Bank Capital
The capital of the Bank of England consists of bank notes
guaranteed by the Government of England.

The 5,000,000 capital of the Bank of Prussia consists of

Government bonds. Against these securities the bank issues
notes.

The National Bank of Argentina was established by an

authorisation to issue 50,000,000 paper pesos. With this currency
land was bought, material purchased, labor employed, and
premises erected free of interest. To-day the bank has 150
branches, and its operations are more extensive than even that
of the First National Bank of New York.

The Commonwealth Bank was started without capital, but under

the amended Act of 1914 the bank, if it needs credit for
extension, must float bonds and load its operations with interest
to private capitalists. This Act has not yet been put into
operation; but, if it is, the bank will have to earn 350,000 for
private investors before it earns a penny for the nation. If the
bank cannot earn it, then the money will have to be made up out
of public funds.

Compare this act of a Labor Government with the favored

position of the Bank National of Argentina, the State Bank of
Prussia, or the Bank of France.

SECURITIES FOR CURRENCY.

Money has the quickest return in commerce. The money invested

is brought back immediately by the disposal of the merchandise,
and is again used for other goods, with the result that the term of
credit is not long. In commerce the term of fixed capital is
shortest, renewal being necessitated on sale of goods.

In manufactures the capital becomes fixed in machinery,

factories, etc., and suffers steady depreciation, requiring
additional increments of capital to maintain the value of the
security.

In agriculture the capital is mainly fixed in land that, under the

ordinary growth of population and improved cultivation, will
increase in value. The return of capital in agriculture is more
uncertain than in commerce or manu factures, owing to the
fluctuations of the seasons, and the regularity of the return can
only approximate to a surety when small and spread over a long
period.

In most countries there are commercial banks, industrial banks,

agri
cultural banks. In a country like Australia, where the
population is sparse, there should be, for economy of
management, one bank with three departments.

Bankers Agreement
Speaking before the Incorporated Accountants Society, on
February 28, 1917, Mr. J. R. Butchart, of the London Bank of
Australia, made this state
ment:

Soon after the outbreak of war the chief bankers of Australia

agreed among themselves to abandon the principle of
convertibility of credit documents into gold, and to effect
settlement in paper money.

Read this in conjunction with article The Unseen Power, page

14.

The Age newspaper (November 16, 1911) said:

The banks have an understanding of their own. It is useless

to appeal from Caesar to Pompey for relief.

Read this in conjunction with article Profiteers Programme,

page 38.

The War Profiteers

The New York cables of August 24, 1917, reported that the United
States steel and eleven other corporations made 470,000,000
dollars profit for the year ending June.

The war profiteers in Great Britain made war profits of over

200,000,000, while Bonar Law admitted that 200 invested in
one ship gave him 1000 in insurance when the ship was
submarined.

The total war profits in Australia are unknown, but 1600 persons
and com panies in the State of Victoria increased their incomes
by 3 millions, while 263 persons and companies increased by
1 millionsenough to keep 10,000 men and their families for a
year at 3 each per week.

That in return for this product and other services, the British
Government supplies Australia with credit in London, and
advances for wool and other products that cannot be transported
for lack of shipping. That the fact Australia is a producer of an
easily exportable product like gold has been an advantage; and
any system of paper currency permits a product to go where it
will be of most service is a good currency. The crime is in the fact
that it becomes an instrument of private instead of being an
exclusive national advantage.

Published by F. Anstey and Printed by J. Ashton for the Publishing and

Publishing Co-operative Society, Ltd. at the Office, 22 Patrick Street,
Melbourne.
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